ComBank partners IFC to develop supply chain financing strategy
The Commercial Bank of Ceylon has announced collaboration with the International Finance Corporation (IFC) to build a Supply Chain Financing (SCF) strategy that will enable the Bank to lend more to Small and Medium Enterprises (SMEs) and establish itself as a leading SCF bank in Sri Lanka.
IFC has identified Commercial Bank as a strategic banking institution in Sri Lanka to take the position as a leading SCF bank, given its prominent presence in corporate and business banking and its strategically diversified branch network. Commercial Bank is also the largest lender to the country’s SMEs.
SMEs comprise more than 75% of enterprises in Sri Lanka and account for 45 % of employment and 52 percent of the country’s GDP. However, access to finance is considered a key challenge many SMEs face, hindering their growth potential. This latest partnership with IFC will facilitate lending to these enterprises, including those owned by women, the Bank said. Commercial Bank Managing Director/CEO Sanath Manatunge said developing supply chain financing will help the Bank expand its SME portfolios in a sustainable and risk-mitigated manner.
“Although domestic and cross-border supply chain finance is considered a vital opportunity for Sri Lankan financial institutions, it is at an underdeveloped stage,” he elaborated.
IFC Country Manager for Sri Lanka and Maldives Alejandro Alvarez de la Campa said: “Small businesses are an engine of growth in Sri Lanka, creating jobs and driving economic growth. Despite their significance, they often struggle to obtain the much-needed working capital for the businesses to survive and thrive.”
“As a longstanding partner of IFC, we have worked alongside Commercial Bank of Ceylon over the years to ramp up access to finance for businesses. This latest partnership will help the Bank strengthen its supply chain financing, enabling it to serve more small businesses and improve theirlinkages to formal supply chains and paving the way for a better future for Sri Lankan SMEs.”
IFC has a strong track record of enabling access to finance to SMEs through supply chain finance programmes across the globe. Commercial Bank’s partnership with the IFC dates back to 2003. IFC has supported the Bank through multiple investments as well as with advisory support. Commercial Bank is one of the three banks that received support from IFC through a $400 million cross-currency swap facility to help facilitate the imports of essential goods such as food, medicines and fertilizers.
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