Colombo, Feb 24(ANI): The Government of Sri Lanka has signed a Loan Agreement with the Asian Development Bank (ADB) to borrow 100 million dollars to implement the Small and Medium Enterprises (SME) Credit Line Project.
The loan agreement was signed by the Finance Minister, Ravi Karunanayake on behalf of the Government of Sri Lanka and the President of ADB Takehiko Nakao on behalf of ADB at the Galle Face Hotel, Colombo.
The project aims to increase the employment opportunities by strengthening SMEs’ access to finance, reports Lanka Page Website.
The proposed line of credit to small and medium size enterprises in Sri Lanka has an innovative feature of allocating loan proceeds to participating financial institutions via an auction system.
The Government will relend the loan funds in local currency to participating banks through eight semi-annual auctions.
At each auction around 12.5 million dollars will be available for relending to the participating banks.
The project also includes an attached technical assistance (TA) amounting to two million dollars which will be financed by a grant provided by Japan for ‘Poverty Reduction’ for export-oriented cluster development to develop Sri Lanka’s next generation of SMEs.
A Steering Committee chaired by the Secretary to the Treasury or a Deputy Secretary to the Treasury will oversee the operations of the auctions.(ANI)