The Commercial Bank of Ceylon has embarked on a strategic partnership with the International Finance Corporation (IFC) to establish itself as Sri Lanka’s leading Supply Chain Financing (SCF) bank. This collaboration aims to unlock greater financial resources for Small and Medium Enterprises (SMEs), a vital segment of the Sri Lankan economy.
Recognizing Commercial Bank’s extensive presence in corporate and business banking, the IFC has identified them as a key partner in developing a robust SCF strategy. This initiative holds immense significance for Sri Lanka’s SME sector, which represents over 75% of the country’s businesses and contributes significantly to employment and GDP. However, access to finance remains a significant hurdle for SME growth.
The new SCF program, facilitated by the IFC partnership, will provide much-needed lending opportunities for SMEs, including women-owned businesses. Commercial Bank’s Managing Director/CEO, Sanath Manatunge, emphasized the potential of SCF to expand their SME portfolio sustainably while mitigating risks. He acknowledged the underdeveloped state of domestic and cross-border SCF in Sri Lanka, highlighting the vast potential for growth.
Echoing this sentiment, IFC Country Manager for Sri Lanka and Maldives, Alejandro Alvarez de la Campa, underscored the critical role of SMEs in driving Sri Lanka’s economic engine. He pinpointed the lack of working capital as a major obstacle for these businesses to thrive.
This partnership builds upon a long-standing collaboration between the IFC and Commercial Bank. Since 2003, the IFC has provided Commercial Bank with crucial financial and advisory support. Notably, Commercial Bank was among the three beneficiaries of a $400 million IFC cross-currency swap facility that facilitated imports of essential goods.
By joining forces, the Commercial Bank of Ceylon and the IFC aim to bridge the financing gap for Sri Lankan SMEs. This initiative has the potential to empower these businesses, improve their integration into formal supply chains, and pave the way for a brighter future for Sri Lanka’s economic landscape.