NDB recently launched a unique, multifaceted initiative “NDB Jayagamu Sri Lanka” to help Sri Lanka’s exporters and innovators in order to assist the country in post-COVID revival.
Addressing the need for corporates to lend a helping hand for the resurgence of Sri Lanka’s economy, the Bank’s Vice President of SME, Middle Markets and Business Banking – Indika Ranaweera shared his thoughts.
Q) What prompted NDB to introduce “NDB Jayagamu Sri Lanka”?
With most of the world still affected by the widespread impact of COVID-19, the banking industry was left facing the monumental challenge of helping to keep the economy afloat and to help it recover in the aftermath. The recent months brought to light an essential need for the involvement of each and every Sri Lankan especially since it became clear that the effects of the pandemic will remain with us for years ahead.
It was in this light that we realized that we as an institution needed to adopt new ways of working and approaches to business in order to assist the country to be reborn from the effects of the pandemic. NDB launched several initiatives to focus on growth sectors while helping out clients to weather this crisis and “NDB Jayagamu Sri Lanka” was one such initiative.
The uniqueness of “NDB Jayagamu Sri Lanka” is that it is more than just a loan scheme with loan approval in seven working days to assist entrepreneurs, exporters and innovators of the country. It is also a platform in which they will receive a boost to kick start their businesses as well as a place in which they will receive the support and the means to create new innovative ways to sell their wares. NDB, along with nearly 10 non-financial service and solution partners, will assist SMEs, innovators and exporters with financial and non-financial support.
Q) What is offered through “NDB Jayagamu Sri Lanka”?
The supply chain disruption brought about by the global impact of the COVID 19, presented a unique window of opportunity for countries to enhance their export markets. Many companies are looking to diversify their supply chain, to move sourcing out of China and some companies want to setup in places other than China. These are unique opportunities that Sri Lankan entrepreneurs can target and “NDB Jayagamu Sri Lanka” aims to assist Sri Lankan entrepreneur’s capture these opportunities.
Internally, NDB has dispatched dedicated teams throughout nine regions in the country to provide advisory services for the Bank’s clients with regard to project management, cash-flow management, business planning etc… Furthermore, NDB has also dedicated legal officers who are available to provide customers with legal support on patenting rights. This support will vary from how to get a patent registration to documentation and any other questions the customers might have regarding legal matters.
NDB’s main objective is to support the current exporters as well as to give the necessary assistance to new entrants, new exporters and innovators.
Q) What are the financial and non-financial services offered?
Since exports play a crucial role in the Sri Lankan economy, influencing the level of economic growth, employment and the balance of payments, a part of “NDB Jayagamu Sri Lanka” will involve Exporter Facilitation. On the other hand, innovations are an important aspect of any form of development. During a time of post-COVID, the requirement for fresh thinking and reinvention has sprung up. The way we do things will have to change with new innovations that are more suitable to the current situation.
Financial assistance for exporters in Sri Lanka will come in the form of working capital finance to meet the funding requirements of exporters along with facilities such as pre- and post-export finance, and other trade related facilities such as bank guarantee, letters of credit revolving STLs etc and with FOREX facilities, Islamic Banking facilities etc… Capital Expenditure financing will also be offered along with benefits such as Concessionary Lending rates, funding based on higher LTV on immovable/movable security, funding on acceptable personal guarantees or SLECIC Guarantee, a 25% waiver on all bank fees and charges, approval within 7 working days, obtaining of buyer ratings through NDB Bank from internationally recognized organizations as well as free 1st Shipment – Cargo Insurance Cover up to $30,000 (with conditions applied).
Through non-financial assistance, NDB intends to offer advisory services such as assistance in finding export markets through Export Development Board, Sri Lanka Export Credit Insurance Corporation (SLECIC), Chamber of Commerce, Daraz and Code 360.com, trade desk to facilitate exporters. It will also assist in arranging links between prospective clients and local bodies to obtain services at discounted prices.
NDB has also invested in offering a comprehensive Enterprise Resource Planning (ERP) solution to its clients, which will facilitate stock and debtor management, payroll management and other accounting functions. NDB has gone further by introducing an E- learning platform with a unique tie up with Bizeconomics to offer training on cash flow management, financial management etc for SME clients using British qualified advisors.
Under the Inventor Facilitation program, in addition to the financial assistance of working capital financing and investment capital NDB has arranged a host of non-financial assistance; including assistance for business registration, patent registration, advisory services on accounting, legal matters etc through bank’s expertise. Further NDB will use its relationships with its existing clients, funding partners, group entities etc. to help bring these new products to market.
The Bank will be addressing the issues faced by those willing to enter into a marketplace, and they will be given advisory services, financial assistance and a host of other benefits.
Q) What is the total financing for “NDB Jayagamu Sri Lanka”?
The NDB Jayagamu Sri Lanka initiative hopes to reinforce NDB’s roots in the development of and providing support to the small and medium enterprises (SMEs), once again rejuvenating the SME focus which is paramount to the revival of the economy in the aftermath of COVID-19 impact and challenges.
Hence, NDB has invested Rs. 500 million to Rs. 1 billion as concessionary lending support to boost much-needed foreign exchange via higher exports and to commercialise innovation. Additionally, NDB is currently negotiating with the Asian Development Bank (ADB) and the International Finance Corporation (IFC) for further funding lines and further negotiations are taking place with regard to the rates offered. Financing will depend mainly on CAPEX and working capital requirements.
Q) What are some of the services provided by the partner companies?
NDB partnered with several institutions in order to provide assistance to the innovators and exporters. Among the initial partners are; the Export Development Board (EDB) from where product development, marketing, advisory and standards support can be obtained; Ceylon Chamber of Commerce offering business networking, training support, Sri Lanka Export Credit Insurance Corporation (SLECIC) offering pre and post shipment insurance support, and Sri Lanka Insurance Corporation and Fairfirst Insurance (Both will offer a first shipment insurance cover of up to $ 30,000).
Additionally, ecommerce brands such as Alibaba, Daraz and another e-platform Code360 will extend e-marketing support with 190 countries and 40 different industries. Codevus Ltd. will offer Enterprise Resource Planning (ERP) solution support whilst Asian School of BiZnomics via Global Manchester UK will offer enhance management and operational competencies. For inventors, dedicated and qualified officers at NDB will provide legal support on patenting rights as well as support for commercialisation of inventions.
Q) What are the most recent endeavours NDB has undertaken under the NDB Jayagamu Sri Lanka initiative?
A) We recently partnered with the SL@100 Platform in order to focus on supporting the mid- market firms during this pandemic situation. We mainly ventured into this platform because the majority of the Sri Lankan businesses are under the SME segment with 45% of employment being under the same category. Thus, in an effort to uplift this segment, NDB Bank tied up with the SL@100 platform in order to develop Sri Lanka’s SME sector and to provide the non- financial assistance required to develop the sector.
Even with the pandemic, we as a Bank have always made it a point to lend a hand to our MSMEs.
Sri Lanka@100 is a private sector-led business development platform that was launched in 2020, to support Sri Lanka’s journey to become a high-income country by 2048, when Sri Lanka will celebrate 100 years of independence. SL@100 will work with mid-market firms and SMEs in optimizing internal operations, enhancing product portfolios, accessing new markets, and attracting capital. SL@100 is funded by the U.S. Government’s development arm, the United States Agency for International Development (USAID).