51477 - MFP-SME NTB

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Summary of Investment Information

Project Number

51477

Company Name

NATIONS TRUST BANK PLC

Date SPI Disclosed

Oct 27, 2025

Country

Sri Lanka

Region

South Asia

Projected Board Date

Nov 25, 2025

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jan 19, 2026

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Dec 11, 2025
Signed : Dec 19, 2025
Invested : Jan 16, 2026

Sector

Commercial Banking - General

Project Description

The proposed Project consists of an investment package of up to US$70 million to Nations Trust Bank Limited (“NTB” or the “Bank”) through two facilities: (1) a four-year, US dollar-denominated, amortizing, senior, unsecured loan of up to US$50 million (“IFC A Loan”) and (2) an unfunded trade facility of up to US$20 million under IFC’s Global Trade Finance Program (“GTFP”).

The proceeds from the IFC A Loan will be used by NTB to on-lend to small and medium-sized enterprises (“SMEs”), including women-owned SMEs (“WSMEs”) in Sri Lanka, which remain underserved and face significant financing gaps.

The proposed GTFP facility will provide critical guarantee support to a leading player in Sri Lanka’s SME and trade finance sector, focusing on export/import-oriented SMEs in key priority areas. The proposed Project will support the recovery of small businesses, which were disproportionately affected by Sri Lanka’s triple crises—namely, the Easter Bombings of 2019, the COVID-19 pandemic, and the 2022 sovereign default. As the country’s recovery strengthens, the proposed IFC investment is anticipated to enhance NTB’s ability to support economic growth and job creation.

Associated Advisory Engagement

IFC is contemplating an advisory engagement with NTB to enhance the Bank’s gender-focused initiatives for the SME sector, strengthen its Environmental, Social, and Governance (ESG) practices, and advance its climate finance strategy.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
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	Trade
Syndications	Loans to SME Borrowers
Straight Senior Loan	Loans to SME Borrowers

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

Development Impact

Stakeholder Effect: Increased access to SME finance: The proposed investment will enable NTB to expand lending to SMEs in Sri Lanka, where access to finance remains constrained by collateral requirements and information gaps. Improved SME access to finance is expected to stimulate firm growth, support employment, and contribute to Sri Lanka’s post-crisis economic recovery. Contribution to Market Creation: Competitiveness: Commercial banks in Sri Lanka have historically been reluctant to lend to SMEs, which are perceived as high-risk due to lack of immovable collateral and reliable financial records. The pandemic exacerbated this perceived risk profile by disproportionately impacting SMEs through reduced consumption. IFC anticipates that the Project will demonstrate the business case for reinitiating lending to SMEs in Sri Lanka. The Project is expected to strengthen competitiveness in Sri Lanka’s banking sector by demonstrating the financial viability of SME-centric lending models, encouraging peers to replicate and expand services to underserved segments, including SMEs.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, SMEs	number	Not Available	Not Available	Not Available
Number of Outstanding Loans, Women-led SMEs	number	Not Available	Not Available	Not Available
Value of Outstanding Loans, SMEs	$	Not Available	Not Available	Not Available
Value of Outstanding Loans, Women-led SMEs	$	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The proposed Project entails a senior loan to Nations Trust Bank (NTB) for on-lending to small and medium enterprises (SME) in Sri Lanka. The Bank is involved in providing long and medium-term financing to corporates, and MSMEs by way of working capital, term loans, and to lesser extent project and structured finance. It also provides several short-term products as well as non-funded products like bank guarantees. The Bank has limited exposure to companies operating in high-risk E&S sectors such as power, transmission, telecom, hospitality, large scale construction. IFC loan will be deployed to SME segment which is dominated by agriculture, followed by industrial (manufacturing), consumer durables, small scale construction, automobiles and garments. Most of these SME sectors pose limited E&S risks and impacts which can be identified and mitigants designed in line with applicable laws and good industry practices. IFC’s loan will not be used to finance any activities on the IFC Exclusion List, any general purpose loan, project finance loan or loan towards higher risk business activities that may involve involuntary resettlement, risk of adverse impacts on indigenous peoples, significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, risk of retrenchment, or significant occupational health and safety risks. IFC loan will not be utilized to finance any utility scale solar power project, any coal related activities, or any financial institution other than low risk. Hence, the E&S risk of the proposed investment is considered medium, and the Project is categorized as FI-2 according to IFC's Policy on Environmental and Social Sustainability. The applicable performance requirements will be i) the IFC- FI Exclusion List; and ii) the relevant national E&S laws and regulations as applicable to the SMEs.

NTB has an E&S risk management system (ESMS) which aligns with IFC Performance Standard 1, and adequate HR policy and procedures generally in line with IFC Performance Standard 2 requirements. The ESMS includes E&S risk categorization procedures, E&S due-diligence, identification of corrective actions, and risk-based monitoring of sub-borrower’s performance. The Bank has nominated an environmental and social officer responsible for overall E&S risk management. The bank is currently revising its corporate policies as part of annual review exercise. It includes a revision of ESMS and HR policies. To cover E&S risks associated with the proposed IFC loan, certain adjustments are needed in the existing ESMS, which the Bank will make for the purpose of IFC financing. This will include guidance and tool for exclusion of high-risk business activities and alignment of due-diligence checklists. The bank follows applicable fire safety regulations across its premises.

S.no	Title	Anticipated Completion Date
1	Update the ESMS	06/23/2026
2	Update the HR policy	05/24/2026

Contacts

For Inquiries About the Project, Contact

Nations Trust Bank PLC
Ms. Kushlani Allis
Chief Financial Officer
+94773831810
Kushlani.Allis@nationstrust.com
46/58 Nawam MawathaColombo 02Sri Lanka
http://www.nationstrust.com

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Fax: 202-974-4384

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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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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