ADB Board approves US$ 75 million as additional support to the development of SMEs in the country
The Asian Development Bank (ADB) has reportedly announced that the Bank’s Board of Directors has approved an additional US$ 75 million in financing to support the development of small and medium-sized enterprises (SMEs) in Sri Lanka.
The Sri Lankan government in its 2018 Budget outlined the importance of the SME sector in the country’s economy and job creation in the country. The government is to launch its Enterprise Sri Lanka programme in March this year to support the policy.
“SMEs have the potential to reduce regional inequalities in Sri Lanka, given that SMEs are more widespread throughout the country than larger enterprises, which are mainly based in the capital Colombo,” ADB Principal Finance Specialist Don Lambert has reportedly said.
“The additional support will ensure that more SMEs have wider access to credit.”
SMEs contribute about 45% of Sri Lanka’s gross domestic product and provide about half of the country’s jobs, according to reports.
The additional financing for the SME Line of Credit Project is expected to increase the available loans for participating banks to US $175 million by 2020, from the original loan figure of US$ 100 million approved in February 2016.
According to reports, this additional support will further encourage local partner banks to grow their SME portfolios – particularly to enterprises outside Colombo or which are women-led – and eventually help Sri Lanka address some of its major development challenges through economic diversification, job creation, women’s empowerment, and inclusive growth.
The ADB’s additional financing to support Sri Lanka’s SME sector will result in enterprises being set up outside Colombo as well. The development drive undertaken by the Sri Lankan government along with the support for SMEs and start ups would result in the growth of the country’s economy. All this will open up new business opportunities in the country.
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