NDB Bank has been granted a loan of USD $15 million by the Netherlands Development Finance Company (FMO) exclusively to facilitate housing loans to its customers. The ten-year subordinated loan is being granted with a 5-year grace period.

The Netherlands Development Finance Company (FMO) is one of the world’s largest bilateral development financial institutions, providing financing solutions to private companies in some 60 developing countries. FMO is rated ‘AAA’ by Standard & Poor’s.

Commenting on the loan, NDB Bank Chief Executive Nihal Welikala said that NDB Bank is confident that with this facility, it will be able to help a wide range of customers who need a roof over their heads. “We will now be able to make a significant contribution towards solving a major problem in the country,” he said.

Central Bank statistics reveal that the annual demand for housing in Sri Lanka is around 100,000 units. Housing loans amount to over 16% of the total advances from commercial banks, a figure of around Rs.134 billion.
According to FMO’s Manager, Business Development Asia, Mr. Aart Mulder, the loan to NDB Bank is a continuation of the company’s policy to stimulate the building of assets through housing finance in Asia, Africa, Latin America and Central and Eastern Europe. “FMO helps client financial institutions meet the wider housing market needs by offering financing on the terms specific to the market. For example, long-term loans are often in local currency. By doing so, we are best able to reach our goal to contribute to the structural and sustainable economic growth in these countries and together with the private sector, obtain healthy returns,” he said.

NDB Bank has the edge over many other institutions offering housing loans because of its centralized processing system where legal, technical and credit approvals are done in- house. This is of great convenience to the customer who does not have to obtain external legal and technical expertise necessary for the processing of the loan. The Bank’s IT system has been upgraded to enhance productivity of loan processing time to cater to customer needs efficiently.

NDB Bank gives a Home Loan either to buy or build a home. It can also be used for extensions or improvements to an existing house. Even land to build a house can be purchased. House renovations too are covered by the NDB Home Loans.

The loan facilitates more persons in the age group of 18 to 55 years to obtain a Home Loan from the NDB Bank. The amount of the loan would depend on one’s capacity to repay, age, loan purpose and the value of the property to be purchased, renovated or extended. The Bank will structure the loans according to the needs of the individual customer thereby making it most convenient for the customer.

The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries. FMO’s investment portfolio is EUR 2.7 billion, which is relatively evenly split among all four global regions. FMO is one of the largest bilateral development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not - or not yet - prepared to take. FMO’s mission: to create flourishing enterprises, which can serve as engines of sustainable growth in their countries.