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Friday July 12th, 2024

Sri Lanka female owned businesses face US$17bn financing gap: ADB country chief

ECONOMYNEXT – About 20 percent of Sri Lanka’s micro small and medium enterprises (MSMEs) are run by women but they face a 17 billion dollar equivalent financing gap, Asian Development Bank’s Country Director Takafumi Kadono said.

The 20 percent of businesses were providing a range of products and services across the country.

“And while they represent such a significant portion, financing and policies have tended not to take into account the specific needs and different challenges they face in starting and growing their businesses,” Kadono told a forum in Colombo.

“As a result, there is an estimate that a surprising 17 billion US dollar financing gap for women-owned MSMEs in Sri Lanka.

“The gender gap in employment and entrepreneurship in Sri Lanka continues to affect women’s economic empowerment opportunities and their resilience to economic shocks.”

The ADB had already started to encourage credit to women under a Women’s Entrepreneurship Finance Initiative (We-Fi) which was initiated by several development lenders and governments.

The ADB has already approved a 100-million-dollar SME credit line to re-finance loans by a number of commercial banks in Sri Lanka which will help women.

Also linked to the project is the setting up of a National Credit Guarantee Institution. Deloitte Advisory Services is helping set up

“I am especially fond of this institution, NCGI, because a woman entrepreneur’s lateral, since female asset ownership is generally low and therefore, they cannot access formal financing,” Kadano said.

“So, it is expected that the NCGI I will support the women entrepreneurs to access finance by giving confidence to the commercial lenders and by bridging this collateral issue.”

Already ADB had helped 1200 women owned small and medium enterprises to access finance and banks to strengthen awareness and ca capacity to respond to the women entrepreneurs’ specific needs, he said through an earlier loan program.

A recent survey has found that there was a wide gap between men and women accessing finance. If more women were able to get finance, globally 5 to 6 trillion dollars in net value addition could be generated.

“Women-led businesses also employ six times more female employees than men-led SMEs,” he said.

“And these are some of the reasons why investing in women’s entrepreneurship makes sense, not only from an equity perspective, but also from broader economic growth as well.

“For this reason, the Asian Development Bank has been a strong supporter of SME development in Sri Lanka, with women entrepreneurs as one of the key target groups of our intervention.”

In Sri Lanka reliable information on women bank customers and borrowers are still not available.

A ‘WE Finance Code’ where local lenders and regulators sign up to boost lending and collect data to make better decisions on lending to women will be piloted in Sri Lanka.

Deloitte Advisory Services will help set up the coalition in Sri Lanka and also help develop a framework to collect sex-aggregated national data which can be used to develop policies and financial products.

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Sri Lanka appoints new Attorney General

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has appointed K A Parinda Ranasinghe PC as Attorney General.

He was appointed in terms of Article 61E (b) of the Constitution of Sri Lanka, the president’s media division said.

The new AG received the appointment from President Wickremesinghe at the Presidential Secretariat on Friday.

He fills the post after the retirement of former Attorney General Sanjay Rajaratnam. (Colombo/Jul12/2024)

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Sri Lanka rupee closes stronger at 301.70/302.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger at 301.70/302.00 to the US dollar on Friday, from 302.80/303.00 to the US dollar on Thursday, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 10.90/11.00 percent, up from 10.85/95 percent.

A bond maturing on 15.12.2027 closed at 11.75/80 percent, up from 11.80/88 percent.

A bond maturing on 01.05.2028 closed at 11.90/12.00 percent.

A bond maturing on 15.09.2029 closed at 12.10/30 percent, up from 12.15/25 percent. (Colombo/Jul12/2024)

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Sri Lanka stocks close up, muted activity

ECONOMYNEXT – The Colombo Stock Exchange closed up on Friday, data on its site showed.

The broader All Share Index closed up 0.35 percent, or 41.71 points, at 11,843; while the more liquid S&P SL20 Index closed up 0.56 percent, or 19.20 points, at 3,454.

Turnover was low at 653 million.

“The market picked up a bit from yesterday but it’s still below the psychological 12,000 mark,” Softlogic Stockbrokers said.

“Local retail participation drove the market predominantly.”

John Keells Holdings Plc brought in Rs109mn to the turnover, and the share closed flat at 194.50.

Melstacorp Plc contributed in Rs104mn to the turnover, and the share closed flat at 85.00.

Sentiment around the banking counters was mostly negative. Sampath Bank Plc closed down at 77.00, closed flat at 101.25, and Hatton National Bank Plc closed flat at 195.25.

The top contributors to the ASPI were Commercial Bank of Ceylon Plc (up at 103.50), Bukit Darah Plc (up at 397.00), and Hayleys Plc (up at 101.00).

Foreign participation remained low as well. There was a higher net foreign outflow of 101 million.

“Foreign selling was seen on John Keells Holdings, and banking counters; Hatton National Bank Plc (down at 195.00), Pan Asia Banking Corporation Plc (down at 20.70), and Commercial Bank of Ceylon Plc.

There was selective foreing interest on the diversified financials sector, particularly in companies that had vehicle leasing portfolios. “We think this might be due to the news of the vehicle import ban possibly ending.”

LOLC Holdings Plc closed up at 440.50, People’s Leasing and Finance Plc closed up at 12.20.

Softlogic Holdings Plc which announced the date of its rights issue, closed up at 8.50. (Colombo/Jul12/2024)

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