Oct 04, Colombo: Sri Lanka today signed an agreement with World Bank to modernize and improve the efficiency of its financial sector which in turn will help small businesses and entrepreneurs compete in the markets and create better jobs.
Financial intermediaries and regulatory institutions stand to benefit from modernized regulatory frameworks and the state-of-the-art financial infrastructure that will ease access to affordable finance and spur an entrepreneurship culture in Sri Lanka.
Financed through a $75 million loan from the International Development Association (IDA) of the World Bank, the new Financial Sector Modernization Project (FSMP) was signed today by Idah Pswarayi-Riddihough, World Bank Country Director for Sri Lanka and the Maldives, and R.H.S. Samaratunga, Secretary to the Treasury, Ministry of Finance and Media.
"A strong financial sector can help Sri Lanka sustain its developmental returns. Efficient financial markets can boost the competitiveness of Sri Lankan firms and overall job creation," said Pswarayi-Riddihough. "Inclusive finance, in turn, can help increase spatial integration and access to opportunities, encouraging entry into the formal economy. To make all this happen, Sri Lankan authorities must continue effectively addressing challenges in the financial sector; such as gaps in financial sector infrastructure, weak legal frameworks, and in oversight functions of the regulators."
"A competitive, diversified, and well-regulated financial market is imperative for Sri Lanka to create better investment finance for micro, small and medium enterprises and thereby provide economic opportunities for the financially underserved." said Anoma Kulatunga, World Bank Senior Financial Sector Specialist and Task Team Leader. "Such financial markets can support shared prosperity and allow Sri Lanka to remain on its development path to an inclusive upper-Middle Income status".
The loan for this project is provided by the International Development Association (IDA), the World Bank's grant and low-interest arm, with a maturity of 25 years that includes a grace period of five years.
This 5 year project will be implemented via the financial sector regulators - Central Bank of Sri Lanka, (CBSL); Securities and Exchange Commission of Sri Lanka, (SEC); and Insurance Board of Sri Lanka, (IBSL).