Sri Lanka to publish national financial inclusion survey in 2019

ECONOMYNEXT- Sri Lanka will be publishing the results of a financial inclusion survey to understand how businesses access funds, Central Bank Governor Indrajit Coomarassway said.

The central bank is in the process of developing a national financial inclusion strategy (NFIS) with assistance from the International Finance Corporation (IFC),

“A financial inclusion survey with the assistance of the IFC has been conducted to understand the overall landscape of the financial inclusion levels across the country,” Coomaraswamy said.

“The survey was conducted successfully covering all the districts in the country and is close to finalization and is expected to be launched by the end of this year,” he said.

The governor was speaking at the 32nd Annual Conference of the Asian credit Supplementation Institutions Confederation held in Colombo.

He said that the central bank and the IFC are also collaborating to develop the NFIS, in order to increase financial accessibility for micro, small and medium-sized enterprises (MSMEs).

“The central bank’s regional department together with the IFC have identified relevant government, semi government and private institutions and academia as stakeholders for the NFIS,” Coomaraswamy said.

“The key objective of the NFIS is to promote a more effective and efficient process to improve financial inclusion across the country.”

“This will be done under four policy pillars, which are; digital finance and payments, MSME finance, consumer protection and financial literacy and capacity building.”

Coomaraswamy said that over 75 percent of businesses in Sri Lanka (over 1 million) are MSMEs, providing employment for 45 percent of the labour force (3.2 million persons) and generating 52 percent of gross domestic product, and thus are vital for the country’s economic growth.

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However, most MSMEs suffer from a lack of access to the formal financial ecosystem, he said.

Coomaraswamy said that high interest rates and the need for collateral are the most frequently cited constraints for MSMEs to access finance in Sri Lanka, and so many are forced to deal with informal financial institutions which charge even higher interest rates.

He said that MSMEs need rationalized structures for financial inclusiveness.

The government, central bank, donor agencies and commercial banks have some programs which provide refinance and credit guarantee schemes and interest subsidies for MSMEs, he said. (Colombo/Oct28/2019)

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