Just as the relationships we share with our business partners are mutually beneficial, we ensure that they remain professional, transparent, and fair at all times. Being deeply rooted in the rural community, we have a deep understanding of the needs of our customers and are able to proactively provide solutions for them while working as business partners.

Strategic partnerships

In 2020, despite the disruptions from COVID-19, we continued to establish high quality strategic partnerships that contribute towards
the Bank’s growth and service objectives.

• We partnered with the Institute of Chartered Accountants of Sri Lanka (ICASL), in the SME Task force, which is a mentoring programme for micro, small and medium enterprises. The ICASL has called for 1,000 chartered accountants to volunteers as mentors to help develop Sri Lanka’s SMEs by educating entrepreneurs on financial principles, accounting concepts and sound financial management. SDB bank is putting forward both mentoring and financial support for SMEs and also micro enterprises through this programme. SDB bank will also provide access to credit to SMEs and micros to help grow these businesses sustainably. The partnership will also expand SDB bank’s customer portfolio over the next few months.
• To support the country’s dairy industry, we entered into a partnership with MILCO Pvt Ltd, the manufacturers of the popular Highland brand of dairy products. SDB bank will be providing financial support for 1,000 dairy farmers from the MILCO farming network in the North Central Province, in Anuradhapura and Polonnaruwa, using the Bank’s own funds. As most traditional commercial bank’s will not support such vulnerable communities, this partnership is a national contribution by SDB bank to support dairy farmers and to help develop the country’s dairy industry. However, the project is also of great strategic value given the potential for the dairy industry’s growth in Sri Lanka. As members of the MILCO network, the selected farmers have a secure market for their dairy products and have a fairly good capacity to repay SDB bank’s credit.
• Already, in 2021, we have partnered with the Sri Lanka Institute of Marketing (SLIM) in the SLIM all island, agri-SME support project, called SLIM Agri-Saviya. SDB bank is a banking partner to provide financial services for agricultural SMEs, which are often underserved and marginalised by traditional commercial banks, due to the high vulnerability of these SMEs to natural disasters and extreme weather.
• In 2019, we successfully raised USD 10 Mn. From Stichting Fondsbeheer DGGF Lokaal MKB duly represented by Triple Jump B.V. and USD 8 Mn. From the Belgian Investment Company for Developing Countries (BIO) through an issuance of unlisted subordinated five-year term debt with a non-viability conversion under Tier 2 Capital of the Bank. Both debts are subject to compliance with the conditions stipulated in the Banking Act Director No. 1 of 2016 on capital requirements under BASEL III guidelines published by the Central Bank and are due to be repaid in 2024.
• To explore opportunities in the global co-operative arena we have relationships with International Cooperative Alliance (ICA), Asian Confederation of Credit Unions (ACCU), International Raiffeisen Union (IRU) and Centre for International Cooperation in Agricultural Banking (CICAB).
• Since 1978, we have also been partnered by Rabo Bank of the Netherlands, The World Council of Credit Unions and other world co-operative associates for the roll-out of various development programmes. Internationally SANASA Federation is connected with all world co-operative federations and is a member of all international and regional co-operative bodies.

Partnerships to benefit customers

Ongoing partnerships to benefit our customers, were continued and expanded in 2020, including the agreement with the Central Bank of Sri Lanka (CBSL) under the Smallholder Agribusiness Partnership Programme (SAPP). The refinancing scheme is an initiative to enhance production levels, productivity, quality, and value-addition of agricultural products. Set to further boost the country’s agricultural sector, the project includes the joint efforts of CBSL, the Presidential Secretariat, International Fund for Agricultural Development (IFAD) and SAPP, along with SDB bank. During the current year, we disbursed concessionary funding for turmeric farmers in the Uva Province and chilli farmers in the North Central Province to meet national demand growth for these items. We also extended concessionary funds to dairy farmers under the SAPP refinancing scheme.

Our partnership with DIMO from 2019, was continued, to offer special leasing facilities for Mahindra tractors. This partnership benefits the agricultural sector, particularly smallholder farmers in need of leasing tractors. Through this partnership we were able to offer customers a range of benefits including leasing facilities of up to 85% of the value of the tractor, which is not usually available in the market, and the flexibility to make payments either monthly or seasonally, which is very important for rural farmers.

The agreement with Brown & Company PLC from 2018, was also maintained, to offer financing solutions for the brand new TAFE and Massey Ferguson four wheel tractors.

We retained our partnership with the Ministry of Defence to support women entrepreneurs and youth, which is aimed at increasing their participation in the workforce. We also continued to support our retired soldiers, who leave the armed forces at a young age of around 40 years, by providing access to credit, through the Uththamachara credit line, to start and develop their own enterprises. This credit line has allowed retired personnel to develop their own livelihoods and maintain their independence.

Procurement policy

In line with our Vision to be “A Leading Partner of National Development,” we have strong partnerships with local suppliers in order to further economic development in the areas and communities within which we operate. For this reason, wherever possible, we also partner with members of the SANASA Federation to procure the products and services that we need in order to fulfil our Mission.

As depicted below, our level of dependency on business partners varies from critical to ad hoc.

Critical operations

Business critical services remain a key focus to the Management of SDB bank.

• Utility services providers
• Travel and transport
• Software support
• Material suppliers

Providers of electricity, telecommunication, and software systems support ensure the smooth functioning of our business. As we have limited capacity to influence or switch such suppliers easily without incurring hefty costs in the case of most services, we take precautions
to build long-standing relationships with them. This contributes towards ensuring that our expectations are met.

Ongoing support

Covering a wide variety of services that allow us to operate at an optimum, on a daily basis, these suppliers range from large corporates to SMEs and individuals.

• Maintenance
• Software suppliers
• Material suppliers
• Staff welfare
• Waste management
• Debt collection agencies

Some of the many sustainability challenges they face are
identified below:

We maintain regular dialogue with these business partners about areas of concern, working towards resolving identified issues and encouraging the adoption of best practices.

Infrequent engagement

While we deal with the following business partners in an ad hoc or infrequent manner, nevertheless, we take pains to ensure that relationships remain strong as their services are of great importance to SDB bank.

• Premises providers
• Contractors
• Professional service providers

As with all supplier groups, we require compliance with all applicable regulations.