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Sri Lanka credit bureau, IFC to improve credit access for small biz
02 Feb, 2013 09:38:31
Jan 02, 2013 (LBO) - Sri Lanka's Credit Information Bureau (CRIB) and World Bank arm International Finance Corporation is boosting credit access to small businesses by making it easier to offer movable assets as collateral.
IFC said it will give advice and assistance to the CRIB to develop a legal framework allowing small businesses to mortgage inventory and equipment which are readily available to take loans rather than traditional assets like loans or property.

"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.

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1. T.S.B.Ratnayake FCMA,CGMA Feb 04
This is an important step foward.World over the contribution made by private S&M businesses is so significant for economic well being of countries & individuals these businesses are becoming an integral part of the new & emerging economic order.

Within the context of SL examples are plenty.Contribution by small holders for the nations Tea & Rubber outputs,contributions by S&M units towards milk,fisheries,transportation are some examples.S&M businesses are tools to harness individual desire to achieve wealth creation for themself & for the country.IFC sharing best practices/ experience in establishing a secured transaction act may help to cut down lead times.