50627 - SLGP NDB

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Summary of Investment Information

Project Number

50627

Company Name

NDB RSF

Date SPI Disclosed

Nov 3, 2025

Country

Sri Lanka

Region

South Asia

Projected Board Date

Dec 5, 2025

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Jan 17, 2026

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Dec 8, 2025
Signed : Dec 16, 2025

Sector

Commercial Banking - Risk Mgmt Facility

Additional Project Attributes

Blended Finance

Project Description

The proposed project (which is subject to the approval of the Board of Directors of National Development Bank PLC (NDB or the Bank) (hereinafter referred to as the “Project”) consists of an unfunded Risk Sharing Facility (“RSF) of up to US$10 million Sri Lankan Rupee (LKR) equivalent maximum IFC risk amount, representing 50 percent of an up to US$20 million LKR equivalent of small and medium enterprises (“SME”) loan portfolio to be originated by NDB. The Project will support the Bank’s lending to SMEs, including agriculture SMEs (Agri-SMEs) and women-owned SMEs (WSMEs). The RSF is expected to have a facility life of up to 8 years inclusive of a ramp-up period of up to 3 years. The Project would be processed under IFC’s Small Loans Guarantee Program (“SLGP”), a programmatic approach to de-risking and scaling-up financing for SMEs in eligible countries.

Associated Advisory Engagement

IFC will provide complimentary advisory support embedded in the RSF aimed at helping the Bank effectively deploy the RSF through training and to build capacity of their SMEs. IFC is also exploring additional advisory services, including supply chain finance, gender, etc.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	10.0
Loan
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Guarantee	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Stakeholder Effect: Increased access to finance for SMEs especially in the agriculture sector: Financial Institutions (FIs) are reluctant to fund the agriculture sector due to the high risks related to weather variability, commodity price volatility and the FIs lack of knowledge needed to extend financing to this sector. Market Creation: Competitiveness: IFC anticipates that via innovation, demonstration, and replication channels, the RSF Program will promote greater competitiveness in the financial sector by encouraging other FIs to scale up their SME portfolios, including Agri SMEs.

IFC anticipates that the proposed Project will provide both financial and non-financial additionality. Financial additionality will be provided through: (i) Financing Structure: this will be derived from IFC’s provision of a relatively new financing product in Sri Lanka and not readily available in the market on commercially viable terms; (ii) Resource Mobilization: under IFC’s Core Mobilization Procedures, the amount of new financing to NDB’s clients mobilized by the guarantee qualify as core mobilization. Non-financial additionality will be provided through Knowledge, Innovation, and Capacity Building as IFC assists NDB in de-risking its new business in SME, WSME and Agri sector. Further, advisory services are being contemplated to accompany the proposed RSF.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Agri as a share of reference MSME loan portfolio	%	Stakeholder effects - Increased access to finance for Agriculture Sector	Not Available	Not Available	Not Available
Number of Outstanding Loans, Agri: SMEs	number	Stakeholder effects - Increased access to finance for Agriculture Sector	Not Available	Not Available	Not Available
Number of Outstanding Loans, SMEs	number	Stakeholder effects - Increased access to finance for MSMEs	Not Available	Not Available	Not Available
Number of Outstanding Loans, Women-led SMEs	number	Stakeholder effects - Increased access to finance for WMSMEs	Not Available	Not Available	Not Available
Number of additional banks adopting de-risking mechanisms such as RSFs	#	Competitiveness - Contribution to market creation	Not Available	Not Available	Not Available
SME share of total loan portfolio	%	Stakeholder effects - Increased access to finance for MSMEs	Not Available	Not Available	Not Available
Value of Outstanding Loans, Agri: SMEs	$	Stakeholder effects - Increased access to finance for Agriculture Sector	Not Available	Not Available	Not Available
Value of Outstanding Loans, SMEs	$	Stakeholder effects - Increased access to finance for MSMEs	Not Available	Not Available	Not Available
Value of Outstanding Loans, Women-led SMEs	$	Stakeholder effects - Increased access to finance for WMSMEs	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The project entails an unfunded Risk Sharing Facility to support NDB to enhance its lending to small and medium enterprises (SMEs), particularly agriculture SMEs and women-owned SMEs. The top borrowers in the SME asset class are agri businesses, food processing industries, trading and export-oriented business (spices, seafood). These industry sectors in SME segment present medium-low Environmental & Social (E&S) risks and impacts. The typical E&S risks include labor and working conditions, supply chain risk related to labor, gender-based violence and harassment, and biodiversity (e.g., in the agribusiness segment), air emissions, waste management, and handling of hazardous materials, in the SME borrower’s operations. The Project will not support coal-related activities, or higher risk business activities that may involve a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, d) risk of retrenchment or e) significant Occupational Health and Safety risks. Hence, the project is categorized as Category FI-2 in accordance with IFC’s Environmental and Social Sustainability Policy. IFC’s applicable performance requirements for this Project will be i) the Exclusion List, and ii) the host country laws and regulations.

NDB has been an IFC client in the past with satisfactory E&S performance, and the Bank has an Environmental and Social Risk Management System (ESMS) in place which is in line with IFC Performance Standard (PS) 1 requirements. The existing ESMS is applicable to the proposed Project, corporate and MSME segment of the Bank. The ESMS includes mechanisms for screening higher risk transactions, for carrying out industry specific E&S due diligence and periodic monitoring of the projects and the portfolio companies. The Bank has appointed an E&S officer with defined roles and responsibilities. The E&S Officer and the Credit Management team are responsible for the ESMS implementation. The current ESMS is commensurate with the E&S risks associated with this Project and NDB will be required to continue implementing it.
The bank's HR policies are aligned with PS 2 on labor and working conditions and it follows the applicable Life and Fire Safety requirements in its own operations that align with applicable laws and IFC PS-4.

Contacts

For Inquiries About the Project, Contact

National Development Bank
Azzam Ahamat
Vice President - Finance
+94 77 737 4000
azzam.ahamat@ndbbank.com
40, Nawam Mawatha, Colombo 2, Sri Lanka
Websitewww.ndbbank.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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