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Message: <blockquote data-quote="monson" data-source="post: 24263331" data-attributes="member: 30005">ADB boosts over 1,700 micro and SMEs with $ 125 m worth lending<img src="http://static.ft.lk/assets/uploads/image_97d61064ed.jpg" alt="" class="fr-fic fr-dii fr-draggable " style="" />ADB’s South Asia Department Public Management, Financial Sector and Trade Division Director Bruno Carrasco (centre) gestures during the media briefing in Colombo flanked by South Asia Department Public Management, Financial Sector and Trade Division Financial Sector Specialist Takuya Hoshino (left) and ADB-SLRM Country Director Sri Widowati   – Pic by Daminda Harsha PereraADB commends SL banks for achieving MSME lending targetsNPLs under the credit lines are below industry average as banks performing well, ADB believes banks can continue to lend to MSMEs in future via its own balance sheetsADB wins bid to disburse $12.5 million multilateral grant exclusively to develop female entrepreneurs in SLLimited access to finance, lack of financial literacy, infrastructure, low economic participation of are key constrains in supporting MSMEs in SL By Charumini de SilvaFollowing the successful disbursement of $100 million financial intermediation loan to uplift micro, small and medium enterprises (MSMEs) in Sri Lanka, the Asian Development Bank (ADB) said that its innovative approach in effectively implementing the project has achieved the intended objective with banks having overshot targets.“At first, we set some targets because there was no previous data, and we later revised those targets. Results have been very positive in terms of development impact. The original loan facility of $100 million approved in the latter part of 2016 was fully disbursed over two and half years to over 1,700 MSMEs with exceeding targets of its first time borrowers and women borrowers,” ADB Public Management, Financial Sector and Trade Division – South Asia Department Financial Sector Specialist Takuya Hoshino told journalists in Colombo on Thursday. Considering the importance of economic growth and job creation in Sri Lanka, the ADB approved an additional $75 million financing for the MSME line of credit project to increase the available loans for 10 participating banks to $175 million by 2020, from the original loan figure of $100 million approved in February 2016. The program has included a $2 million technical assistance grant project supported by the Japan Fund for Poverty Reduction to train the MSMEs on good business practices.According to the ADB, Sri Lankan banks have overshot lending targets to MSMEs credit program to avoid penalties and falling behind competitors, prompting the lender to increasing funding and raise thresholds.“To encourage banks to reach out and understand MSMEs without creating market distortion, ADB’s projects were structured to be behaviourally-driven models that provide incentives and penalties to banks,” Hoshino said.He stressed that the program had targeted 5% of the lending to women-led MSMEs initially, which had expanded the target to 20% and by October 2018, funding had been disbursed to 27.6% to MSMEs led by women.The target of 10% of funds for first-time borrowers had been increased to 20%, while the commercial banks and specialised banks have disbursed 26% exceeding the target. In addition, the target of 50% of funding for agri-business had been increased to 70% and had eventually disbursed 91.4% to the main target group. The maximum loan a business could take was Rs. 50 million.Hoshino also noted that $25 million has already been disbursed under the additional financing of $75 million credit line started in 2018, while 41% of loans were disbursed among women-led MSMEs.Furthermore, he pointed out that at least 78 companies representing 1,249 employees and Rs. 6.4 billion in annual turnover have become registered to avail of ADB’s credit line of Rs. 783 million.More:- <a href="http://www.ft.lk/top-story/ADB-boosts-over-1-700-micro-and-SMEs-with----125-m-worth-lending/26-673939" target="_blank">http://www.ft.lk/top-story/ADB-boosts-over-1-700-micro-and-SMEs-with----125-m-worth-lending/26-673939</a></blockquote>

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