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ADB funds enhance financial capacity for Sri Lanka's SMEs: Reports

28 Mar '24

2 min read

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Sri Lanka and ADB signed $100 million loan agreement recently.
Out of $100 million, $50 million is to provide small and medium-sized enterprises more access to finance and build their resilience to external shocks.
The agreement underscores collaborative efforts between ADB and Sri Lankan government to promote inclusive economic growth for SME development.

Recently, the Asian Development Bank (ADB) and the government of Sri Lanka inked a $100 million loan agreement. Half of this sum, $50 million, is earmarked to enhance access to finance for small and medium-sized enterprises (SMEs) in the country.

Media reports underlined this adding this allocation aims to bolster their resilience against external shocks, such as economic downturns and climate change impacts even as the remaining $50 million will facilitate the issuance of partial credit guarantees via the National Credit Guarantee Institution.

Representing the government of Sri Lanka, KM Mahinda Siriwardana, secretary to the Treasury at the Ministry of Finance, signed the agreement. On behalf of the ADB, Utsav Kumar, deputy country director of ADB’s Sri Lanka Resident Mission, signed the agreement.

This financial injection is strategically designed to fortify the financial capabilities of Sri Lankan SMEs, empowering them to withstand various challenges and capitalise on growth opportunities.

By providing increased access to finance, SMEs can better navigate economic uncertainties and adapt to changing environmental conditions, thereby fostering long-term sustainability and economic resilience.

The utilisation of partial credit guarantees through the National Credit Guarantee Institution further enhances the support framework for SMEs, facilitating their ability to access credit and secure funding for expansion, innovation, and development initiatives.

The agreement underscores the collaborative efforts between the ADB and the Sri Lankan government to promote inclusive economic growth and foster a conducive environment for SME development.

Fibre2Fashion News Desk (DR)

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