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Description |
The project entails a $15 million, 5-year ADB loan to NTB for onlending to SME borrowers. The project will help meet rising demand for financing by SMEs and give them better access to funding. It will also support the growth of Sri Lanka's banking sector by providing longer-term financing. To promote inclusive financial development, the project will include geographic targets for NTB onlending in post-conflict areas, as well gender lending targets to support women involved in SMEs. |
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Objectives and Scope |
To support SME lending and to help NTB better manage its growth and to benefit from SME-related technical assistance that is currently being implemented by the IFC. The ADB proceeds will be onlent to SMEs that have an annual turnover not exceeding SLRs600 million. This definition of SLRs600 million is consistent with the CBSL definition. The project will aim to ensure that a minimum of 50% of ADB's facility in SLRs equivalent will be onlent to SMEs outside Colombo and that 30% of this 50% targeted will be onlent to SMEs in the northern, eastern, and southern provinces that were most affected by the civil war and tsunami and are in particular need of access to finance to expand or start new businesses and reduce high levels of unemployment . To promote access to finance for women, 20% of the ADB's facility in SLRs equivalent will be onlent to SMEs owned or controlled by women borrowers. |
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Linkage to Country/Regional Strategy |
The project supports institutional and financial sector development and the deepening of the financial sector by increasing the ability of a mid-sized bank to expand lending to SMEs. |
