CDB raises USD 60 Million in foreign funding for SMEs
With its strong ethos of nurturing and fostering micro and SMEs in the country to optimize their contribution towards the nation’s macro growth, Citizens Development Business Finance PLC (CDB) raised USD 60 Mn in FY 2018/2019 to uplift and develop this vital engine of growth in the country’s economy. Having already gained a first loan of USD 6 Mn by BIO in 2013 which CDB disbursed astutely to micro and SMEs in the country and paid back fully, the platform of trust and credibility given to CDB by foreign agencies is reiterated further with this larger tranche. Working with three funding agencies whose objective is to develop and improve the micro and SME sectors in developing and emerging economies, CDB’s collective of USD 60Mn in the current financial year comprises USD 10 Mn from the Belgian Investment Company for Developing Countries (BIO) and USD 25 Mn each from the Dutch development bank of the Netherlands FMO and impact investment manager BlueOrchard Finance Ltd headquartered in Switzerland. The timeline for repayment is spread over five years. The funds from FMO and BlueOrchard were arranged by Emerging Markets Global Advisory Limited (EMGA).
As Director Corporate Finance Roshan Abeygoonewardena explains, “With our aspiration of being a financial powerhouse, we have to look at the big picture and the big picture shows us that SMEs form the nucleus of growth. Micro entities and SMEs have contributed with great tenacity towards building this country and as a responsible corporate steward, it is vital that CDB fosters that tenacity to maximize on the immense potential these SMEs and micro enterprises possess.”
While appreciating the funding agencies for their trust in allocating the USD 60 Mn to CDB for disbursement, Abeygoonewardena also mentioned that the funding objectives fall well in line with the extensive financial services that CDB provides. “This is definitely a springboard for the country to build a strong private sector. With CDB spearheading a drive to achieve the country’s Sustainable Development Goals, we herald the collaborations we have established with these three funding agencies which will assist us in moving closer towards meeting these goals.”
FMO, which holds an AAA rating from both Fitch Ratings and Standard & Poor’s, is a public-private partnership with 51% shares held by the Dutch state and 49% by commercial banks, trade unions and the private sector investing in over 85 countries. It emphasizes sustainable growth through income generation and business development via responsible environmental and social emphasis. FMO arranged risk-participations from three of its funds, the ACTIAM-FMO SME Finance Fund, NN FMO Emerging Markets Loans Fund and FMO Privium Impact Fund, for a total of USD 11.5 Mn. These funds have been set up by FMO for investment by institutional investors and private banking clients to allow them to co-finance with FMO.
BlueOrchard is a leading global impact investment manager, dedicated to fostering inclusive and climate-smart growth. BlueOrchard was founded in 2001, by initiative of the UN, as the world’s first commercial manager of microfinance debt investments. Today, BlueOrchard provides institutions in emerging and frontier markets with debt and equity financing and investors around the world with premium investment solutions, including credit, private equity, and sustainable infrastructure. With a major global presence and offices on four continents, BlueOrchard has invested to date more than USD 5.7bn across 80 emerging and frontier markets, enabling tangible social impact.
BIO’s capital is held by the Ministry for Development Cooperation in Belgium and adds entrepreneurship development among micro and SMEs as its objectives for funding. BIO invests directly and indirectly in SMEs in developing countries and as such makes a structural contribution to the socio-economic growth of those host countries.