Govt. seeks $ 100 m ADB loan for SME development

Wednesday, 25 October 2023 00:32 - - {{hitsCtrl.values.hits}}

The Cabinet of Ministers approved the formalisation of associated agreements with the aim to obtain a $ 100 million loan from the Asian Development Bank (ADB) to support small and medium-sized enterprises (SMEs).

The Government is set to roll out a new initiative called the ‘Small and Medium Enterprise Development Finance Project’, tailored to assist entrepreneurs who continue to grapple with securing financing for their businesses.

The ADB, recognising the potential impact of this endeavour, has pledged to provide funds amounting to $ 100 million.

This financial injection is poised to provide a much-needed boost to the SME sector, empowering entrepreneurs and driving economic progress in the region.

This development comes as part of the ‘Small and Medium Enterprise Credit Scheme Project’, a Government initiative aimed at providing investment and working capital loans to SMEs at concessional interest rates.

This project, which has received a substantial financial boost of $ 165 million from the ADB, seeks to address the longstanding challenge of collateral-based lending favoured by banks over cash flow-based alternatives.

“To address this, the Government has taken crucial steps towards the establishment of the National Credit Protection Institute, a move that is anticipated to significantly ease the hurdles faced by SME entrepreneurs,” a statement comprising weekly Cabinet Decisions issued by the Government Information Department noted.

The proposal, put forth by the President in his capacity as the Finance, Economic Stabilisation and National Policies Minister received unanimous approval from the Cabinet of Ministers.