Feb 23, 2016 (LBO) – Sri Lanka’s government signed a loan agreement with the Asian Development Bank (ADB) to borrow 100 million US dollars to implement a small and medium enterprise credit line project, the Finance Ministry said.
“The project aims to increase the employment opportunities by strengthening the SME’s access to finance,” the Finance Ministry said in a statement.
The project agreements of the SME credit line was signed with the ADB and 10 local financial institutions: Peoples Bank, Bank of Ceylon, Commercial Bank, Sampath Bank, Hatton National Bank, DFFC, Regional Development Bank, National Development Bank, Nations Trust Bank and the Seylan Bank.
The loans will be disbursed to participating financial institutions such as local banks through an auction system.
The government will re-lend the loan funds in local currency to participating banks through eight semiannual auctions at which the re-lending terms and amounts will be decided and at each auction around 12.5 million US dollars will be available for lending, the statement said.
A steering committee chaired by the Treasury Secretary will oversee the operations of the auctions.