LankaBangla Finance Limited, a leading non-bank financial institution (NBFI), has received a loan of $15 million from BlueOrchard Microfinance Fund, which is managed by a Switzerland-based impact fund manager BlueOrchard Finance Limited.
This is the second cross border debt transaction for LankaBangla after it received its maiden foreign funding in 2019 from Islamic Corporation for the Development of the Private Sector (ICD), said a press release.
The loan proceeds will be utilized to cater to the financing needs of small and medium enterprises (SMEs) and green and sustainable projects as LankaBangla will focus on assisting SMEs to recover from the effects of the Covid-19 pandemic.
It would be a great help for them to expand their businesses and create new jobs economic development takes place post pandemic, the release also said.
For BlueOrchard, this is their first entry in the Bangladesh market and LankaBangla is the first Bangladeshi recipient institution of their financing.
BlueOrchard seeks to contribute to economic, environmental, and social development and to improve access to financial services to those at the bottom of the pyramid as well as SMEs, mainly in emerging markets.
BlueOrchard Finance will continue to support financial institutions catering to the needs of micro, small and medium businesses and to economic, environmental and social development more broadly, said Normunds Mizis, chief credit officer of BlueOrchard Finance.
“Obtaining foreign currency loans is a part of our corporate strategy to widen the borrowing mix, which will definitely help us to arrest our cost of funds to some extent. As we received the fund at a competitive rate of interest, we will be able to shift the same benefit to our end-clients, especially SMEs and emerging sectors," said Khwaja Shahriar, managing director and CEO of LankaBangla Finance.
The transaction has been arranged by Green Delta Capital Limited, which is also acting as the security agent on behalf of BlueOrchard Microfinance Fund in this transaction.
Green Delta Capital Limited has always been enthusiastic about reaching newer heights and it has brought BlueOrchard on board for the first time ever in Bangladesh where entire due-diligence were done digitally, said Md Rafiqul Islam, managing director and CEO of Green Delta Capital.
He also said that Investment in LankaBangla from investors like Blue Orchard will also help to unlock more foreign financing in Bangladesh.