Manila-based Asian Development Banks said it has approved a 100 million US dollar loan to Sri Lanka to help small and medium enterprises.
Of the loan, 50 million dollar credit line for “underserviced” SMEs in the export, tourism, technology, agriculture, and manufacturing sectors.
“SMEs play a critical role in Sri Lanka’s economy, contributing 52% to the country’s gross domestic product and employ 45 percent of the population,” ADB Senior Financial Sector Specialist Manohari Gunawardhena said in a statement.
“It is therefore important to provide SMEs, particularly women-led enterprises, with the necessary support to sustain and grow the sector’s contribution to the economy.
“This project will provide working capital and improve SMEs’ access to finance, helping them expand operations and prepare for the changing environment.”
A 500,000 dollar facility to cover guarantee subsidies for women-led SMEs will be set up under the program.
A gender gap assessment will be conducted with a view to improving women’s access to finance.
The loan will support the government’s equity contribution through the National Credit Guarantee Institution Limited (NCGI), which provides partial credit guarantees on loans to SMEs.
ADB will help the credit guarantee insitution adopt procedures to effectively support SMEs including underwriting guarantees, risk management and risk-based pricing, and guarantee recovery operations.
The project will incorporate green finance elements through climate adaptation and mitigation measures for SMEs, ADB said.
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