Colombo, March 12, 2007
— IFC, the private sector arm of the World Bank Group, today announced the expansion of its Global Trade Finance Program, with Sri Lanka’s Nations Trust Bank joining the program. IFC is providing NTB with a $5 million facility within its Global Trade Finance Program.
In addition, the IFC SouthAsia Enterprise Development Facility will assist the bank on a specific program for institutional capacity building that will help enhance the quality of service to the bank’s SME clients.
IFC has had a relationship with NTB since the bank’s inception in 1999 and was one of its initial shareholders. IFC also has had a long-standing relationship with the bank’s promoters, the John Keells Group, since the mid-1990s.
The Global Trade Finance Program supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks. The program allows issuing banks, such as Nations Trust Bank, to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.
Farida Khambata, IFC Regional Vice President for Asia and Latin America, said, “IFC’s support to NTB fits in well with our strategy of partnering with financial institutions and banks that are committed to developing Sri Lanka’s SME sector. The IFC Global Trade Finance Program will provide NTB with risk coverage in a difficult market and a global network that will assist the bank in undertaking trade finance deals. This paves the way for countries like Sri Lanka to increase their share of global trade. In addition, the IFC SEDF capacity building program will help the bank gain exposure to international best practices as it develops value-added services for SMEs.”
Zulfiqar Zavahir, Chief Executive Officer at NTB, welcomed the partnership, saying, “We are delighted to extend our relationship with IFC through the Global Trade Finance Program. Nations Trust Bank will expand its network of correspondent banks and create new and valuable business opportunities for our clients in Sri Lanka and across the world. In addition, through the capacity building program, we hope to adopt better risk management practices.”
Anil Sinha, General Manager of IFC SEDF, explained, “We will collaborate with NTB in developing appropriate SME banking products and services and building their institutional capacity through training.” Mr. Sinha is also the South Asia Regional Coordinator for IFC’s advisory services, an increasingly large component of IFC’s contribution to private sector growth in developing regions.
Gilles Galludec, IFC’s Country Manager for Sri Lanka and Maldives, said, “The Global Trade Finance Program is an important mechanism to bring on board local banks to an active global network that facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions on a low-risk basis.” Jeetendra Marcelline, IFC’s Head of Investments in Sri Lanka and Maldives, added, “Trade finance is a good example of the many types of products IFC offers to develop a sector."
Trade development and advisory services for issuing banks represent an integral part of the Global Trade Finance Program. Technical assistance modules comprise basic and intermediate courses on trade finance. On a selective basis, IFC places experienced trade finance bankers with issuing banks to help them develop their trade finance and other banking skills.
About Nations Trust Bank
Nations Trust Bank was incorporated in January 1999 and began commercial operations in July 1999. The bank is sponsored by John Keells Holdings Limited and Central Finance Company Limited. The bank has 31 branches in Sri Lanka, and its primary business activities include retail banking, private banking, corporate banking as well as leasing for SMEs.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
About IFC SEDF
The IFC SouthAsia Enterprise Development Facility is a multidonor funded facility managed and operated by IFC. It is one of the 11 regional programs managed by IFC worldwide. Set up to promote the growth of SMEs in the region, IFC SEDF is funded by IFC, the governments of the Netherlands and Norway, and the European Commission, DFID (UK), CIDA (Canada), and the Asian Development Bank. It provides increased access to finance and quality business development services to projects in Bangladesh, Bhutan, Northeast India, the Maldives, Nepal, and Sri Lanka. IFC SEDF also helps create an enabling business environment and supports value addition to firms through tailored enterprise and organization-specific advisory services, capacity building programs, training, and research. In Sri Lanka, IFC SEDF is funded by IFC and the governments of the Netherlands and Norway.
