(UTV|COLOMBO) – The Asian Development Bank (ADB) has granted $75 million in additional financing to continue support toward the development of small and medium-sized enterprises (SMEs), considered vital for economic growth and job creation in Sri Lanka.
The loan agreement was signed Friday (16) at the Ministry of Finance by the Country Director of the ADB’s Sri Lanka Resident Mission Sri Widowati on behalf of ADB and Secretary to the Treasury, Ministry of Finance Dr. R.H.S. Samaratunga for the Government of Sri Lanka.
The additional financing for the SME Line of Credit Project will increase the available loans for participating banks to $175 million by 2020, from the original loan figure of $100 million approved in February 2016.
This additional financing for the first time will provide loans to small and medium scale entrepreneurs giving priority to women entrepreneurs and small and medium scale entrepreneurs established outside Colombo.
This additional support will further encourage local partner banks to grow their SME portfolios- particularly to enterprises outside Colombo or are women-led-and eventually help Sri Lanka address some of its major development challenges through economic diversification, job creation, women empowerment, and inclusive growth, according to the ADB.
With the additional funds during the project period it is expected to increase the provision of credit facilities through banks to small and medium scale enterprises, create an innovative system to grant loans to SMEs, increase the required capital for entrepreneurs of targeted cluster SMEs and strengthen the competitiveness of SMEs in communication technology / business process outsourcing.
Apart from providing wider access to finance to SMEs, the project is also developing innovative SME financing schemes, while building capacity of SMEs particularly in information and communications technology, business process outsourcing, fruits and vegetables, as well as processed food and beverage.
The additional funding of US$ 75 million will be utilized in three trenches of $25 million each. The government will relend the funds in local currency to participating banks through three semiannual allocations based on the banking sector’s average weighted deposit rate.
[alert color=”faebcc” icon=”fa-commenting”]Keeping up to date with breaking news while you are on the move is now simple with UTV Alerts [textmarker color=”8a6d3b”]Type REG UTV and send to 77000[/textmarker] on your Dialog or Hutch mobile connection[/alert]
