By:Staff WriterColombo (LNW): The Asian Development Bank (ADB) reaffirmed its unwavering commitment to bolster the recovery of stressed small and medium enterprises (SMEs) and praised Sri Lanka’s steadfast dedication to rebound from the economic crisis.
The assurance was extended by ADB Country Director Takafumi Kadano during a meeting with State Minister of Finance Shehan Semasinghe held at the Finance Ministry recently.
Kadano shared insights into forthcoming projects in Sri Lanka, particularly in the power sector.
He commended the success of ongoing projects in Sri Lanka with the assistance of the Asian Development Bank. He further said that the ADB is ready to provide funds to restructure several state-owned enterprises.
The ADB has allocated US$ 786 million for Sri Lanka this year for implementation of 27 projects
State Minister of Finance Shehan Semasinghe said that Sri Lanka is discussing with ADB for a credit guarantee scheme worth $200 million, to support SMEs.
“This scheme will be established and implemented by the Ministry of Finance. The discussions are progressing well,” he said.
He added that the government is very concerned about the SME sector and is keen to get them out of the furrow. “The SME sector is hit the hardest by the pandemic, and the ensuing economic crisis.
We are looking at many avenues to emerge from the bad situation.” He also said the government is expecting the banks to pass on the benefits to the sector by lowering inflation rates and reducing interest rates.
He said “We do understand the banks’ constraints but with improving economic indicators, we expect the banking sector to help out the small and medium entrepreneurs.”
SMEs make up 52 per cent of the GDP and 45 per cent of national employment.
The Ministry of Finance is negotiating another two loans with the ADB. Finance Ministry officials said that one is for banking sector stability worth $200 million and the other one is $100 million worth of loans for power sector reforms. “The banking sector stability loan is to be finalized by early next month,” one official said.
Recognizing Sri Lanka’s commendable efforts in steering clear of a crisis, ADB Country Director Takafumi Kadano highlighted the potential for progress that often emerges from adversity and expressed optimism about the ability to transition towards a sustainable, long-term economic trajectory.
With an unequivocal commitment to sustained support, Kadano underscored that the ADB’s assistance would remain resolute, especially in alignment with the initiatives of the International Monetary Fund.
He reiterated the ADB’s keen interest in conducting an in-depth study of Sri Lanka’s SME sector to identify and implement effective support mechanisms.
State Minister Shehan Semasinghe also appreciated ADB for continued assistance throughout the crisis and subsequent recovery phases.
Shedding light on the segment most severely impacted by the crisis, he emphasized the vital role of SMEs in the economic fabric, urging their swift revitalization. He highlighted the Government’s efforts in providing concessions to revive these enterprises and underlined the pressing need for additional support.