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HNB offers working capital loans to SMEs

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HNB PLC has been selected as a partner financial institution by the Asian Development Bank (ADB) to disburse part of the $13.5 million in funds allocated to the SME-Line of Credit (SMELoC) emergency response program.

The ADB program aims to support and strengthen Sri Lankan MSMEs affected by the current economic crisis with working capital credit facilities, with a particular focus on agriculture, tourism and export sectors.

Working towards this goal, HNB seeks to disburse funds to select companies through its extensive network of MSMEs.

“We are delighted to be part of this powerful AfDB initiative. Given the unique strength and breadth of HNB’s network of SME clients across the island, and our longstanding relationship with ADB, we believe HNB is uniquely positioned to help elevate this sector, which , even through our current challenges, continues to serve as the backbone of the Sri Lankan economy. We urge all eligible SME clients facing challenges in their working capital needs to take advantage of this invaluable opportunity,” said Bandara Rekogama, Head of Refinancing and Special Lending Products at HNB.

SMEs that meet the eligibility criteria of an annual turnover of Rs. 750 million will be offered a maximum facility of Rs. 10 million, with a repayment period of three years. All loans granted under the program must be used exclusively for working capital needs, including recurring expenses such as salaries, overheads and the purchase of raw materials. HNB will provide attractive interest rates for the facility, significantly lower than current market rates.

The bank has supported over 650 MSME clients with working capital and Capex facilities worth over Rs. 6.5 billion through ADB – SME LoC schemes.

Set up to support businesses affected by the Covid-19 pandemic, the emergency response program initially disbursed US$10 million to 280 local businesses in the form of emergency working capital loans over the past two years.

HNB has disbursed loans worth Rs. 600 million for about 132 women entrepreneurs with a grant of Rs. 100 million under the SME LoC – Wefi window.