July 15, 2007 (LBO) – A US government agency is giving credit guarantees to small Sri Lankan businesses to increase their access to loans from a specialized leasing firm, the US embassy in Colombo said. The guarantee would be given for up to 3 million US dollars (330 million Sri Lanka rupees) of money lent by Lanka Orix Leasing Company (LOLC), a listed financial firm.
The United States Agency for International Development (USAID) would underwrite 50 percent of the credit risks of loans given by LOLC for micro, small, and medium-sized businesses.
The enterprises operate in the agriculture, fisheries, tourism, and renewable energy sectors in the Eastern, North Central, and tsunami-affected areas of the Southern Province.
Many of these businesses are unable to prosper because of lack of access to capital, said USAID Mission Director Rebecca Cohn said in a statement.
“This hinders the growth of small businesses and contributes to continuing poverty and frustration among the population.
“Entrepreneurs in the South and in the East have been especially hard hit, first by the tsunami and now by the country’s escalating conflict.
With average credit amounts ran