Sarvodaya Development Finance PLC

Period

2024

Country

Sri Lanka

Sector

Agriculture

Financial facility

AgriFI

AgriFI provides a senior debt of USD 3 million enabling SDF to hedge the FX risk via a local Sri Lankan bank. The financing aims at supporting the company to grow its agricultural portfolio, and especially the agricultural leasing product which enables farmers to access agricultural machinery such as tractors and harvesters at affordable rates and become owners via a leasing scheme, allowing them to strongly improve their yields and overall income.

Project overview

SDF is a licensed finance company acting as the economic arm of the Sarvodaya Movement, one of the oldest NGOs in Sri Lanka aiming at developing rural areas. It provides financial services, including leasing of income-generating assets, to societies, individuals & SMEs. It has 150,000+ customers, 57% being women, and 78% outside of the Western Province demonstrating its focus on rural financial inclusion. SDF has a strong focus on agriculture, which represents more than a third of its leasing and loan portfolios.

Funding objective

AgriFI provides a senior debt of USD 3 million, with a back-to-back mechanism enabling SDF to hedge the FX risk via a
local Sri Lankan bank. The financing aims at supporting the company to grow its agricultural portfolio, and especially
the agricultural leasing product which enables farmers to access agricultural machinery such as tractors and harvesters at affordable rates and become owners via a
leasing scheme, allowing them to strongly improve their yields and overall income.

Investment rationale

Sri Lanka has been through several crisis, but SDF has shown solid resilience by focusing on financing the “real” economy and agriculture. This long-term debt will enable them to keep developing the agri portfolio while keeping appropriate conditions for farmers.