Press release —
Swedfund invests USD 15 million to expand access to capital for MSMEs in Sri Lanka
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.
Sri Lanka has faced a period of economic challenges following several years of financial instability which have constrained access to financing for businesses and households. MSMEs represent a significant share of employment and economic activity, yet many businesses still lack access to affordable long-term financing, particularly outside major urban areas.
“Access to finance is critical for MSMEs to invest, grow and create jobs. At a time when long-term funding remains constrained in Sri Lanka, this investment will help increase funding for smaller businesses while also supporting the transition to more sustainable transport. LB Finance’s focus on MSMEs and extensive presence outside Colombo will help reach businesses that are often overlooked by traditional lenders,” says Björn Areskog, Investment Director at Swedfund.
Swedfund’s investment will enable LB Finance to expand lending to MSMEs across Sri Lanka, including rural businesses and women-led enterprises.
A portion of the financing is made available to loans for electric and hybrid vehicles used by MSMEs, contributing to reduced emissions and more sustainable transport solutions.
Swedfund will also support LB Finance in strengthening its environmental and social risk management systems and climate related lending practices.
About LB Finance
LB Finance PLC is one of Sri Lanka’s non-banking financial institutions with wide reach across the country. The company provides leasing, lending and deposit products to corporate, SME and retail clients through a nationwide network of more than 225 branches. LB Finance employs around 4,600 people.
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About Swedfund
Swedfund is Sweden’s development finance institution with the mission to reduce poverty through sustainable investments in developing countries. Swedfund plays an important role in the implementation of the 2030 Agenda and the Paris Agreement on climate. Swedfund shares the same goal as development cooperation in general, but the tools Swedfund uses are different. Swedfund has two instruments to fulfil its mission: sustainable investments in the private sector and technical feasibility studies through the Project Accelerator targeting the public sector.
Swedfund's investments contribute to the creation of decent jobs and increased access to essential products and services such as electricity and food. Swedfund is a long-term investor and is additional and catalytic through its investments and by mobilising private capital. Swedfund's feasibility studies support sustainable public infrastructure development, trade, and export opportunities for Swedish solutions.
We are part of Swedish development cooperation, and we measure and report all our results. As a state-owned company, Swedfund is managed by the Ministry of Finance and financed through portfolio reflows and annual capital injections for which the Swedish Ministry for Foreign Affairs is responsible.
For more information: please visit www.swedfund.se/en
