LB Finance secures 35 million dollars in long-term funding

A USD 35 million long-term funding agreement between LB Finance Plc, Norway’s Norfund, and Sweden’s Swedfund directs new foreign capital toward Sri Lanka’s small business sector.

This move improves access to financing during a period when such resources remain limited despite a recovering national economy.

The facility includes USD 20 million from Norfund and USD 15 million from Swedfund. It represents the inaugural partnership between these European development finance institutions and LB Finance, the second-largest non-bank financial institution in the country, with assets surpassing Rs. 400 billion.

Funds will support expanded lending for micro, small, and medium enterprises, while also promoting climate-smart agricultural technologies and financing for electric or fuel-efficient hybrid vehicles. This initiative aligns with broader goals to bolster private sector growth and sustainable development.

Development finance institutions are increasingly providing long-term capital to productive sectors as the domestic financial industry rebuilds international funding connections following the economic crisis.

Swedfund Investment Director Björn Areskog stated that financing is essential for smaller businesses to invest, grow, and create jobs. He noted that this investment directs support toward businesses often underserved by conventional lenders, particularly due to LB Finance’s extensive presence outside Colombo.

Micro, small, and medium enterprises constitute the vast majority of businesses and remain a primary source of employment in Sri Lanka. Many of these entities still encounter difficulties obtaining affordable long-term financing following the surge in interest rates during the economic downturn.

The partnerships also strengthen the environmental, social, and governance framework of LB Finance through technical assistance from the two international institutions. Executive Director Ravi Tissera expressed that the company views the collaboration as a privilege and intends to use these facilities to pursue growth strategies with greater vigor.