HDFC Bank of Sri Lanka, the premier housing finance bank in the country, signed a Memorandum of Understanding with the Central Bank of Sri Lanka recently which enables HDFC to further diversify its loan portfolio towards dairy development industry.

This newest Commercial Scale Dairy Development Loan Scheme (CSDDLS) will focus medium and large scale entrepreneurs who are engaged in dairy development sector.

The bank expects that the credit facilities at a concessionary rate of interest under this new loan scheme will encourage improving productivity of the dairy farmers to convert existing subsistence level to the Commercial level. The CSDDLS will facilitate an individual, a group or a registered company in the sector and under this scheme, maximum loan facility available is Rs. 25 million. Loans could be obtained from the 33 branches of the HDFC Bank located island wide.

The new loan scheme covers the purchase of cows, establishment of cattle sheds, buildings, irrigation systems (sprinkler, pipeline), construction of well or agro-well, fodder cultivation, establishment of new farms, farm development, construction of bio gas units, expansion of existing farm, production of dairy based products or milk processing, purchase of machinery and equipment such as tractor, water pump, refrigerator, cream separator, milking machine and grass chopper, freezer trucks for milk transportation and storage to preserve milk and milk based products, any other innovative activity directly related to dairy development or promoting the culture of drinking liquid milk and other innovative methods recommended by veterinary surgeon or livestock officer for improvement of production and quality of products. The bank expects to fulfill the financial needs of the existing and prospective clients through CSDDLS.

HDFC's primary objective has always been to serve lower and middle income groups to meet their needs of housing finance and allied services. With the amendment of the HDFC Act in 2011, HDFC was able to diversify business operations. Under the new broader operations mandate, the bank entered the country's leasing, micro finance, SME and agriculture markets. The micro credit and SME credit lines have effectively leverage HDFC's past experience in working with rural and urban populations for more than 30 years since the bank is more focused in providing housing finance to low and middle income segments in the country. The bank introduced a unique mobile banking concept to the country in 2008 which has widened the operational scope far beyond the physical limits of the branch network and has enabled the bank to directly access thousands of customers located in the rural interior.