"IFC’s assistance in this project will pave the way for a well-developed Secured Transactions Act, and provide transparent rules for creditors,” said Ananda Silva, chairman, CRIB was quoted as saying by IFC.
"It will also facilitate the use of movable assets as collateral, benefitting businesses and supporting economic growth."
IFC said Sri Lanka's small and medium enterprises make up 80 to 90 percent of businesses and generates 75 percent of the employment.
But a 2011 Investment Climate Assessment by the World Bank has found that only 35 percent of Sri Lankan small firms can access a loan or a line of credit, and around 14 percent of those who applied were denied financing.
"This initiative will make it easier for small businesses and entrepreneurs with few fixed assets to obtain the financing they need to grow," said IFC executive vice president and chief executive Jin-Yong Cai said in a statement
"And it will allow financial institutions to reduce risks and diversify their lending portfolios."
IFC said in a committed portfolio of 274 million US dollars covering infrastructure, tourism, renewable energy, finance, and health care.