Breaking News Business News CSE Info Daily FT Daily Mirror LBO NEWS360

Market Closed

Top 10 Stocks Search

DFCC signs US$ 15 m lending facility with ADB

Posted on the September 20th, 2012 under News by

In an attempt to increase loan access to middle class consumers, DFCC Vardhana Bank and the Asian Development Bank (ADB) yesterday signed an agreement for a US$ 15 million 10-year lending facility.

The facility granted to DFCC is expected to be disbursed amongst young entrepreneurs, first-time home ownership by family units, self-employed individuals and women borrowers. Part of the loan has been earmarked for people in the north and east as well as the tsunami-affected in the southern part of the country.
Five per cent of the loans are to be allocated to women and a minimum of 30 per cent of the overall facility, which is Rs. 2 billion, will be reserved for rural areas outside of Colombo, the north and east, as well as the tsunami-affected south.

ADB Country Director Rita O’Sullivan was upbeat of the opportunities given to middle income people to have access to finance. She urged more banks to widen their loan window so that people with moderate means could also benefit from lending facilities.
“At the end of the day, money matters. This measure will have a broader impact on the construction industry and other sectors of the country, resulting in overall development that goes beyond mere profits,” she told reporters.
The loan facility has to be repaid to ADB in 10 years at a variable interest rate based on London Interbank Offered Rate (LIBOR). It is given as part of the ADB’s private sector lending window and O’Sullivan remarked that the institution was gradually easing off on loans given by their public lending fund. This also means that the interest charged will be at commercial rates.    
DFCC Vardhana Bank CEO Lakshman de Silva responding to questions noted that interest rates for the loans would be competitive and the company would strive to keep it as low as possible.
“We expect average loans to be around Rs. 4 million and the tenure could be as long as 15 to 20 years. Around 70 per cent of the total value of the house will be funded by us according to the current practice and ability of the borrower to repay. We have 127 branches and service centres that can competently target the rural sector,” he stressed.
Currently Sri Lanka’s mortgage debt to gross domestic product ratio stands at six per cent compared to a global average of 30 per cent. Only an estimated 20 per cent of the population presently has access to housing loans. The country is estimated to need between 350,000 to a million units of housing, which is stated to increase by 100,000 in a year, a study done by the World Bank shows.

View article at source
DFCC signs US$ 15 m lending facility with ADB

Leave a Reply

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Stock Profit / Loss Calculator

Buy Rs: No of Shares Day Trade
Sell Rs: