ADB Country Director inspects SME success in Kandy

On Aug 7, 2024

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Asian Development Bank Country Director in Sri Lanka Takafumi Kadono visited ADB aided SMEs in Kandy. Kadono was overwhelmed by the success of projects and pledged more support to Sri Lankan SMEs in the future.

The ADB has also completed the disbursement of the Small and Medium-Sized Enterprise Line of Credit project (SMELoC), operated since 2016, amounting to approximately $350 million . As of end June 2024, 10,380 small and medium-sized enterprises (SMEs) in Sri Lanka have benefited from the SMELoC loan and out of this more than 33% were WSMEs and 1,553 WSMEs have received the We-Fi grant blended with SMELoC loan.

In May this year the ADB approved a USD 100 million loan to support small and medium-sized enterprises (SMEs) through two components: a new SME line of credit ($50 million) for those affected by the economic crisis to provide emergency working capital (SMELOC2 component); and a loan to the government for an equity infusion ($50 million) into the National Credit Guarantee Institution Limited (NCGI), which will provide partial credit guarantees (PCGs) on loans to SMEs with inadequate or no collateral (PCG component).

Meanwhile the ADB and the Government signed a loan agreement for US$100 million for subprogram 1 of a policy-based loan (PBL) to support and facilitate reforms aimed at enhancing the financial sustainability of the power sector in Sri Lanka. This loan is part of a broader programmatic approach PBL, consisting of three subprograms totaling US$300 million, dedicated to transforming the power sector.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

National Credit Guarantee Institution to unveil this year
The National Credit Guarantee Institution Limited (NCGI) to assist SMEs in Sri Lanka will be launched this year with a USD 50 million initial infusion by the ADB, Country Director in Sri Lanka Takafumi Kadono said. The NCGI will cater to overcoming longstanding collateral barriers faced by SMEs in Sri Lanka.

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