Apr 21, 2014 (LBO) – Sri Lanka needs private equity to play a bigger role in financing business which will help them grow faster with less leverage and become world beating firms, the Central Bank said. Financial sector professionals have attributed it to lack of skills of those who were taken to manage them, some of whom came from banking.
Some foreign PE firms which began operations after the end of a 30-year have seen mixed results.
Earlier this month the International Finance Corporation, said it will give 10 million US dollars as seed funding to a US Sri Lanka joint venture PE management firm, which is expected to raise 50 million US dollars.
The central bank said it its recently released annual report that “it is imperative to strengthen the role of private equity as a major source of financing for Sri Lankan enterprises.”
“The central bank is very keen that private equity funds come and operate in Sri Lanka,” Governor Nivard Cabraal told reporters.
“We may not be involved directly, but it is a kind of an initiative that we would like to see taking place in our country.
“Because that is the next stage of taking the well-managed companies that needs capital and even