ADB funding for new finance project for SMEs in Sri Lanka

The Asian Development Bank (ADB) has agreed to provide USD 100 million for a new project set to be launched by the Sri Lankan government, titled the ‘Small and Medium Enterprise Development Finance Project’.

Accordingly, the Cabinet of Minister on Monday (23 Oct.) approved a proposal presented by President Ranil Wickremesinghe, in his capacity as the Minister of Finance, Economic Stabilisation and National Policies, in this regard. The project aims to aid those entrepreneurs of Small and Medium Enterprises (SMEs) who find it difficult to finance their businesses.

Meanwhile, the establishment of a ‘National Credit Protection Institute’ was also agreed on, through which banks will prioritise asset-based lending over cash-flow based lending, allowing for less rigidity.

The ‘Small and Medium Enterprise Credit Scheme Project’ was initially implemented by the government of Sri Lanka, with financial support amounting to USD 165 million from the ADB, to provide investment and working capital loans to SMEs at concessional interest rates.