IFC to support micro enterprises

IFC, a member of the World Bank Group, is investing $7 million in Senkadagala Finance PLC to support the growth of micro and small businesses across the country.

IFC's funding will enable Senkadagala Finance to extend over 50,000 loans to micro, small, and medium enterprises over a five-year period. 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 branches and service centres across Sri Lanka over the next five years. It will also increase access to credit for micro and small businesses," said Director and Additional CEO, Senkadagala Finance, Sanath Bandaranayake.

Micro, small, and medium enterprises play an important role in Sri Lanka.

According to IFC estimates, in 2011, 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 IFC Country Manager for Sri Lanka and the Maldives, Adam Sack.

"Small businesses are critical to Sri Lanka's continued growth and development, it is vital they have access to affordable financing options," he said. Senkadagala Finance PLC, incorporated in 1968, is a licensed deposit-taking institution. It has 61 branches and service centres across Sri Lanka.

Sri Lanka is a priority country for IFC. It has a committed portfolio of over $280 million in Sri Lanka which 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.

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.