Sri Lanka gets $75mn from ADB for lending to small businesses
ECONOMYNEXT – The Government of Sri Lanka has got an additional US$75 million from the Asian Development Bank to be lent through banks to support small businesses expand and hire more people.
The finance ministry said the funds are in addition to $100 million lent by the ADB in 2016 to finance the Small and Medium-Sized Enterprises (SME) Line of Credit Project which is to be completed in two years by March 2020.
“The objective of the project was to strengthen the SME sector in Sri Lanka by facilitating access to finance and expand the employment opportunities in the sector,” statement said.
“The project is being successfully implemented and given the importance of this intervention, the government decided to obtain an additional financing through a loan of USD 75 million with the intention to scale up the ongoing SME Line of Credit Project.”
The additional financing will be used to develop innovative SME financing schemes, enhance capacity of SMEs in targeted clusters to access financial services and strengthen international competitiveness of the information and communication technology/business process outsourcing (ICT/BPO) cluster.
The additional loan of $75 million will be disbursed in three tranches 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.
The proceeds of the loan will be available to the participating banks for relending to the SMEs based on the previously agreed targets between the Asian Development Bank and the government specially focusing on first time borrowers, women-led SMEs and SMEs located outside of Colombo.
(COLOMBO, February 16, 2018)