Feb 19, Colombo: Sri Lanka's Senkadagala Finance entered into an agreement with the International Finance Corporation (IFC), a member of the World Bank Group Tuesday (February 18) for a loan facility of US$ 7 million to support the growth of micro and small businesses across the country.
IFC's funding will enable Senkadagala Finance to extend over 50,000 new loans to micro, small, and medium enterprises over a five-year period, IFC said in a release.
The loan will help Senkadagala Finance increase its presence in Sri Lanka, focusing on the northern and eastern regions. This is IFC's first investment in a non-bank financial institution in Sri Lanka since 1999.
"IFC's investment is timely, as we plan to expand our reach by opening 50 more branches and service centers across Sri Lanka over the next five years. It will also increase access to credit for micro and small businesses," said Sanath Bandaranayake, Director/Additional CEO of Senkadagala Finance.
Micro, small, and medium enterprises play an important role in Sri Lanka. In 2011, IFC estimates that the sector accounted for over 90 percent of all businesses in the country, and contributed nearly 52 percent to Sri Lanka's Gross Domestic Product. Small businesses also play a critical role in promoting balanced regional development. However, credit constraints hinder their development.
"Our investment in Senkadagala will create indirect employment, reduce poverty, and boost shared prosperity," said Adam Sack, IFC Country Manager for Sri Lanka and Maldives. "Small businesses are critical to Sri Lanka's continued growth and development, it is vital they have access to affordable financing options."
Senkadagala Finance PLC, incorporated in 1968, is a prominent, licensed deposit-taking institution. It currently has 61 branches and service centers across Sri Lanka.
Sri Lanka is a priority country for IFC. IFC's committed portfolio of over $280 million in Sri Lanka covers projects across a range of sectors, including infrastructure, tourism, renewable energy, finance, and healthcare. IFC also provides advisory services to promote sustainable growth among small and medium enterprises by facilitating access to finance, and by offering capacity-building and training opportunities.