ADB provides US $ 75m for SMEs | Sunday Observer

ADB provides US $ 75m for SMEs

Secretary Ministry of Finance and Mass Media Dr. R H S  Samaratunga and Country  Director ADB, Sri Lanka Resident Mission, Ms. Sri Widowati at the signing of the agreement.
Secretary Ministry of Finance and Mass Media Dr. R H S Samaratunga and Country Director ADB, Sri Lanka Resident Mission, Ms. Sri Widowati at the signing of the agreement.

The Government of Sri Lanka had obtained ADB Financial assistance of USD 100 million in 2016 to finance the Small and Medium-Sized Enterprises (SME) Line of Credit Project. The objective of the project was to strengthen the SME sector by facilitating access to finance and expanding the employment opportunities in the sector. The project is being successfully implemented and given its importance, the Government of Sri Lanka decided to obtain additional financing through a loan of USD 75 million with the intention to scale up the ongoing SME Line of Credit Project.

Secretary to the Ministry of Finance and Mass Media Dr. R H S Samaratunga, on behalf of the Government of Sri Lanka and Country Director ADB – Sri Lanka Resident Mission Ms. Sri Widowati, on behalf of the ADB, signed the loan agreement at the Ministry of Finance and Mass Media last week.

The additional financing will be utilized to: Increase of financing to SMEs through intermediaries, Development of innovative SME financing scheme, Enhancement of capacity of SMEs in targeted clusters for accessing financial services and Strengthening of international competitiveness of information and communication technology/business process outsourcing (ICT/BPO) cluster.

The additional loan of USD 75 million is planned to be disbursed in 3 tranches of approximately USD 25 million each. The Government will relend the loan 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 etc.

The Ministry of Finance and Mass Media will be the Executing Agency of the SME Line of Credit (Additional Financing). The Department of Development Finance will be the Implementing Agency for Outputs of Increase of financing to SMEs through intermediaries, Development of innovative SME financing scheme and the Export Development Board will be the implementing agency for outputs of Enhancement of capacity of SMEs in targeted clusters for accessing financial services and Strengthening of international competitiveness of information and communication technology/business process outsourcing (ICT/BPO) cluster. The overall project is scheduled to be completed by 31st March 2020. 

Comments