Softlogic needs to continually raise long term funding in line with the rising demand for its commercial vehicle and other loans. However, due to the limitations of the Sri Lankan market, it is able to access only short term, relatively expensive funding, which puts pressure on its profitability and also leads to Asset / Liability mismatches.
In order to access Sri Lanka’s debt capital markets, the best source for long term finance for it, Softlogic requires GuarantCo’s assistance. The facility of LKR 1.4bn provided to Softlogic enables it to raise 5-year affordable funds through a pioneering credit enhanced Non Convertible Debenture issuance
Softlogic finances small commercial vehicle owner-operators and other transport linked businesses, most of whom would otherwise not have access to formal financing from banks.
The demand for Softlogic’s loan/ lease products is rapidly rising due to Sri Lanka’s strong economy, but raising funding to meet such growth is challenging.
GuarantCo’s support enables Softlogic to raise affordable long term finance for the benefit of its customers. The facility will also help in the development of Sri Lanka’s debt capital markets by increasing the acceptability of credit enhanced instruments.