HNB/EDB announces new SME Export Credit facility
View(s):HNB PLC, working closely with the Export Development Board of Sri Lanka (EDB), has announced the launch of HNB SME Export Credit, a pioneering new facility designed to meet the requirements and aspirations of SMEs.
“Over many years that HNB has been actively engaged in the SME sector, we have developed extensive and lasting relationships with businesses and entrepreneurs across the island and this is most certainly one of our core strengths as a bank. Moving forward we are confident that HNB will be able to serve a catalyst role that will drive a drastic improvement to the nation’s export performance, the results of which will feed directly into the local and provincial economy of Sri Lanka. Such developments are vital for grassroot development in Sri Lanka and HNB looks forward to working closely with the EDB and SMEs across the island to achieve this goal,” said HNB Managing Director/CEO, Jonathan Alles in a media release this week.
The credit facility will focus on bringing on-board new-to-bank export clients for pre and post shipment financing with limited tangible security, with special emphasis on tea, rubber, spices, cinnamon, coconut, textiles and garments, fisheries and related industries. The bank has also extended its first credit facilities under the HNB SME Expo Credit brand to 10 local SME exporters from these sectors.
HNB Deputy General Manager – SME, Jude Fernando said that the most difficult obstacle for SMEs seeking to compete in international markets is the long lead time between delivery on an export contract and the time taken to receive payments. Currently the only branded facility specifically designed for SME exports is the new facility launched by HNB which will offer individual clients up to Rs. 40 million in export credit with concessionary rates and easy payment terms, in order to enable them to trade on credit with international buyers.
The EDB commended HNB for its efforts to harness the SME sector’s potential and provide invaluable links to international markets and buyers. “It has been our experience that many of our local SMEs have the skills, the talent, and the innovative products necessary to make in-roads into international markets. The only thing that many of them were lacking was the financial capacity necessary to compete in this sector,” said EDB Chairperson and Chief Executive, Indira Malwatte.
According to the EDB’s most recent data, SME sector exports account for 4.01 per cent of Sri Lanka’s total exports, which stood at Rs.59.7 billion as at 2016. The majority of these products comprised agri-based, processed food, apparel, gems, coconuts and spices.