USAID joins Sri Lanka’s Hatton National Bank and Sampath Bank to offer US$ 9 million for local financing of MSMEs
The US Agency for International Development (USAID) along with the USAID Development Credit Authority (DCA) and Sri Lanka’s Hatton National Bank PLC and Sampath Bank PLC have announced a new partnership for a programme of up to US$ 9 million for local financing available to private, micro, small, and medium-sized enterprises (MSMEs) throughout Sri Lanka, a statement issued by USAID has announced.
This seven year programme will help to address the current lack of financing to these key borrower groups, the USAID has noted.
Accordingly, this partnership is to be complemented and be further supported by USAID’s YouLead programme that strengthens employability and self-employment opportunities for youth in Sri Lanka.
Mission Director for USAID Sri Lanka Reed Aeschliman has reportedly said the signing of this agreement, which took place on September 5, 2018 in Colombo, is part of broader and ongoing USAID support for Sri Lanka.
“We at USAID are proud to encourage private sector lending in key sectors that are vital to the economic development of Sri Lanka. Increasing access to credit enables youth entrepreneurs to improve their own lives, and helps small and medium enterprises to spur further economic growth in their respective regions.”
According to USAID, the programme represents a crucial step toward enabling Sri Lanka’s private sector and youth entrepreneurs to access capital, expand businesses, and, ultimately, to create more jobs.
The agreement will unlock critical resources that will help spur innovation, foster investment, and provide critical resources to under-served segments of Sri Lanka’s economy including existing MSMEs and start-ups.
USAID’s DCA works with investors, local financial institutions, and development organizations to design and deliver investment alternatives to mobilize local financing.
The move by USAID to join forces with two private banks in Sri Lanka to offer financing to local MSMEs is an encouraging sign for the MSME sector in the country. The evolution of the MSME sector would result in an overall growth in the country economy and also expand the investment opportunities for foreign businesses/investors in Sri Lanka. The steps taken in Sri Lanka to assist youth and start ups would help provide opportunities for foreign businesses to form partnerships with local companies. Apart from providing the US GSP trade concessions to Sri Lanka, the US has continuously been a development partner of the island nation.
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