Oct 01, 2010 (LBO) – The World Bank is giving a 57.4 million US dollar to Sri Lanka to finance small and medium sized business affected by a global downturn and is also giving a partial credit guarantee to banks using the credit line to lend. “The banks can independently access the line of credit or risk sharing facility, but the success of the facilities will depend on the application of modern SME lending technologies and risk management procedures.”
The World Bank said while Sri Lankan banks remained strong, small business which made up 91 percent of firms have been affected.
“The World Bank is uniquely positioned to help Sri Lankan banks to gain better access to medium and long term funds, for on-lending to SMEs,” Daniel J. Boyce, World Bank’s acting Country Director for Sri Lanka and the Maldives said in a statement.
“We hope the development of SMEs will lead to higher incomes and increasing employment opportunities for a larger segment of the population in the country.”
In addition to a credit line and guarantees, the World Bank will also give technical assistance to banks to develop the small and medium enterprise (SME) lending capacity and give technical assistance to SMEs.
“The project aims to incentivize ban