ADB and Government of Sri Lanka Sign Loan Agreement to Support SMEs Affected by COVID-19
The Asian Development Bank (ADB) and the Government of Sri Lanka today signed a $165 million loan agreement to provide immediate financing support for small and medium-sized enterprises (SMEs), which have been severely affected by the coronavirus disease (COVID-19) pandemic, and long-term financing to underserved SMEs, including businesses led by women and tea smallholders.
Secretary, Ministry of Finance S. R. Attygalle signed the loan agreement for the Government of Sri Lanka and ADB Sri Lanka Resident Mission Country Director Chen Chen signed on behalf of ADB.
“The government highly appreciates ADB’s long-term commitment to supporting Sri Lanka’s development. SMEs will be essential to recovery from COVID-19. The new loan from ADB will help the government’s efforts of supporting SMEs in and after the COVID-19 pandemic,” said Mr. Attygalle.
“We are glad to be of assistance to the SME sector at this crucial juncture when the sector has suffered a severe setback due to the COVID-19 pandemic,” said Mr. Chen “We trust that this assistance will help SMEs to revive their businesses and contribute once again significantly to the Sri Lankan economy.”
The new financing will build on the ongoing Small and Medium-Sized Enterprises Line of Credit Project, which ADB approved in 2016 to strengthen SMEs’ access to finance. The new loan will introduce a new credit line, cofinanced with a $1.25 million grant from the Japan Fund for Poverty Reduction (JFPR), to promote capital investment by tea smallholders. A supplemental $1.75 million technical assistance grant from JFPR will build tea smallholders’ financial literacy and capacity to access financial services and develop policies to promote value chain development for the Sri Lankan tea industry to strengthen its international competitiveness.
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.