LB Finance
Introduction
Swedfund invests USD 15 million in LB Finance to expand financing for micro, small and medium sized enterprises (MSMEs) in Sri Lanka and support lower emissions transport solutions.
The investment is expected to contribute to job creation and long-term private sector development.
Read more in our press release: Swedfund invests USD 15 million to expand access to capital for MSMEs in Sri Lanka
Facts
SDG in focus
No Poverty
End poverty in all its forms everywhere.
Decent Work and Economic Growth
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Gender Equality
Achieve gender equality and empower all women and girls.
Sector
Financial inclusion & MSME financing
Swedfund’s investments in Financial Inclusion are made in regulated banks and microfinance institutions in order to increase access to debt capital for entrepreneurs, MSMEs and low-in come earners, or in local investment platforms, local companies or through so-called private equity funds to increase access to equity capital for MSMEs.
Value creation
Impact
The investment is expected to support economic growth, financial inclusion and job creation by increasing access to finance for small and medium-sized businesses. It may also contribute to climate action through financing of electric and hybrid vehicles for business purposes.
Additionality
The investment is additional by providing long-term financing that is scarce in the Sri Lankan market. The investment helps diversify LB Finance’s funding base and supports its efforts to reach more small and medium-sized businesses. Swedfund also contributes to strengthening the company’s sustainability, business integrity and client protection practices.
ESG
Requirements
In line with Swedfund’s Policy for Sustainable Development, the portfolio company is required to materially comply with, inter alia: (i) all internationally recognised human rights (ii) the EDFI harmonized exclusion list and EDFI Fossil Fuel Exclusion List, (iii) local environmental, health & safety and labour laws and regulations, (iv) applicable IFC Performance Standards, (v) the ILO’s Declaration on Fundamental Principles and Rights at Work and the ILO’s Basic Terms and Conditions of Employment.
ESG Risk
E&S risk categorisation is Medium Risk (FI-B), based on potential environmental and social risks associated with the company’s operations and contextual risks in the country.
ESG Mitigation Measures
Swedfund supports the company in further developing its environmental and social management systems. Swedfund also supports the development of the company’s business integrity management system.
Applicable IFC Performance Standards
IFC Performance Standards (PS) 1 – 2 are applicable.
Whistleblowing channels and Grievance Mechanism
Swedfund’s whistleblowing services can be used by employees, contractors and others at Swedfund, and by the companies and funds in which Swedfund invests. The complaints mechanism can be used for all types of complaints concerning Swedfund and Swedfund’s portfolio companies, but not for complaints concerning individuals as a result of restrictions arising from data protection legislation. 🔹 Link in website footer.
Other investments within
Financial Inclusion & MSME Financing