A French financial institution has stepped into financing Sri Lanka's small and medium-scale enterprises via the commercial Bank of Ceylon.
Proparco, a subsidiary of Agence Française de Développement (AFD) Group dedicated to private sector financing, signed an agreement with the Commercial Bank of Ceylon for the funding arrangement recently.
Through this agreement, Proparco will be supporting a major player in financing Sri Lankan small and medium-sized enterprises through a USD 25m loan allocated to Commercial Bank of Ceylon (CBC),AFD official said.
By allocating a USD 25m loan to CBC, Proparco is reasserting its support to SMEs in the country after many other credit lines targeted towards this key segment of the economy.
This new long-term financing is expected to create or support over 5,000 jobs in Sri Lanka.
This operation is in line with Proparco’s commitment to support access to finance for SMEs in developing countries and emerging economies.
Over the last ten years, Proparco’s parent company, the French Development Agency, has committed 600 million EUR to sustainable projects in Sri Lanka in key development sectorsincluding water and sanitation, urban development, energy, and irrigation.
With this project, the AFD Group's investments in the country will cross 850 million euro.
Small and medium-sized enterprises (SMEs) are the backbone of Sri Lanka’s economy.
They make up about 75% of the total number of companies in the country and account for almost half of employment and GDP in the country.
Despite the key role they play in the national economy, Sri Lankan SMEs experience major difficulties in obtaining credit, which has a significant impact on their capacity to invest, recruit and grow.