WB grants USD 75 million loan to modernise SL’s financial industry
The government of Sri Lanka has signed an agreement to develop and modernise Sri Lanka’s financial industry with the hope that it would then assist small businesses and entrepreneurs compete in the markets and create better jobs.
The World Bank through its International Development Association (IDA) is financing the project through a USD 75 million loan and the, the new Financial Sector Modernisation Project (FSMP) was signed WB Country Director for Sri Lanka and the Maldives, Idah Pswarayi-Riddihough and Ministry of Finance and Media Secretary to the Treasury R.H.S. Samarathunga.
“A strong financial sector can help Sri Lanka sustain its developmental returns. Efficient financial markets can boost the competitiveness of Sri Lankan firms and overall job creation.Inclusive finance, in turn, can help increase spatial integration and access to opportunities, encouraging entry into the formal economy. To make all this happen, Sri Lankan authorities must continue effectively addressing challenges in the financial sector; such as gaps in financial sector infrastructure, weak legal frameworks, and in oversight functions of the regulators,” Pswarayi-Riddihough stated.
“A competitive, diversified, and well-regulated financial market is imperative for Sri Lanka to create better investment finance for micro, small and medium enterprises and thereby provide economic opportunities for the financially underserved. Such financial markets can support shared prosperity and allow Sri Lanka to remain on its development path to an inclusive upper-Middle Income status,” said World Bank Senior Financial Sector Specialist and Task Team Leader, Anoma Kulathunga said. “
The IDA has provided the low-interest loan for a maturity period of 25-years including a 5-year grace period.
This five-year project will be implemented via the financial sector regulators – Central Bank of Sri Lanka, (CBSL), Securities and Exchange Commission of Sri Lanka (SEC) and Insurance Board of Sri Lanka.
Such loans act as indicator to potential investors that foreign monetary agencies have enough confidence in Sri Lanka to provide the country with such loans. Investors could also look at forming joint ventures with the government of Sri Lanka to implement certain projects included in the aid package.
|Article Code :||VBS/AT/09102017/Z_5|