IFC helps Sri Lankan small businesses grow
 IFC, a member of the World Bank Group, is working with Sri Lanka's
Credit Information Bureau (CRIB) to make it easier for up to 37,000
micro and small businesses to access loans and other forms of financing
using movable assets as collateral.
IFC will provide advice and assistance to CRIB to support the legal
framework which will enhance financing for firms against movable assets
such as inventory and equipment. Expanding the collateral registry to
include non-fixed assets, all of which are more readily available to
small businesses, makes it easier for them to obtain financing even
without traditional mortgages like land or property.
"IFC's assistance in this project will pave the way for a
well-developed Secured Transactions Act, and provide transparent rules
for creditors," said Chairman, CRIB, Ananda Silva. "It will also
facilitate the use of movable assets as collateral, benefitting
businesses and supporting economic growth."
Sri Lanka's small and medium enterprise sector constitutes between 80
to 90 percent of businesses and generates 75 percent of the employment.
However, the World Bank's 2011 Investment Climate Assessment
estimates that only around 35 percent of Sri Lankan small firms can
access a loan or a line of credit and around 14 percent of those who
applied were denied financing.
"This initiative will make it easier for small businesses and
entrepreneurs with few fixed assets to obtain the financing they need to
grow," said IFC Executive Vice President and CEO Jin-Yong Cai. "And it
will allow financial institutions to reduce risks and diversify their
lending portfolios."
Sri Lanka is a priority country for IFC. IFC's committed portfolio of
$274 m 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.
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