Dutch development bank FMO happy to lend $ 25 m to Senkadagala Finance

The Dutch development bank FMO said yesterday it was proud to have on-boarded Senkadagala Finance Plc as a client with a $ 25 million loan facility recently. 

FMO Director Financial Institutions Huib-Jan de Ruijter said: “We are proud of having onboarded Senkadagala as client of FMO and to provide a $ 25 million loan facility. The FMO loan supports the growth of Senkadagala’s leasing activities of hybrid and electric vehicles and thus contributes to a reduction in CO2 emissions in Sri Lanka. The loan is also partly dedicated to on-lending to women-owned businesses. FMO’s partnership with Senkadagala therefore significantly contributes to SDG 13, climate action and SDG 10, reduced inequalities next to job creation, SDG 8.” The comment follows Senkadagala Finance PLC recently receiving a $ 25 million five-year Green Investment Facility from Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO). 

FMO, a Dutch Development bank co-owned by the Dutch Government and Dutch Commercial banks, has a celebrated history of being the driving force behind investments that empower entrepreneurs globally. The $ 25 million injection into Senkadagala Finance PLC will pave the way for the growth of the institution’s lending portfolio. This is the 3rd international investment by Development Finance Institutions in Senkadagala Finance PLC, which has raised about $ 50 million in recent times. Speaking on this new investment, a Senkadagala Finance PLC spokesperson stated, “This feat is a testament to the operational and financial strength, stability and reliability of Senkadagala Finance PLC. We are committed to making funds accessible to our MSME clients by way of leases. The FMO investment will now help enable our clients to make environmentally conscious decisions when acquiring vehicles with increased ease. The importance of hybrid and electric vehicles in meeting global goals on climate change cannot be understated. The FMO investment facility will undoubtedly play a vital role in the reduction of Sri Lanka’s vehicular carbon footprint.” 

He further went on to note, “Considering the current global and local economic situation post COVID-19, the FMO investment is an indication of its unwavering developmental agenda, and it is encouraging that the FMO has placed their trust in Senkadagala Finance PLC.”

Since the announcement of this financing facility, financial analysts have viewed the benefits of this facility as twofold. Internally, the enhancement of Senkadagala Finance PLC’s leasing products is set to further drive up the institution’s market share as the numbers of vehicles registered in Sri Lanka grow exponentially, year on year. It is also noteworthy that registrations of vehicles powered by renewable energy have gained traction in the country as well. Externally, a foreign currency loan which is as sizable as this could enable other foreign Development Financial institutions to make similar investments in the industry, thereby improving the level of financial inclusion in Sri Lanka. 

Initially established in the Hill Capital of Kandy in 1968, Senkadagala Finance PLC has grown to become one of the largest licensed finance companies operating 100 branches under the purview of the Central Bank of Sri Lanka. In line with its objectives of increasing the level of financial inclusion for both borrowers and investors in Sri Lanka, Senkadagala Finance PLC notably acquired Candor Asset Management (CAM), a Sri Lankan asset management company in March this year.