Sri Lanka to modernize financial sector with USD75mn loan

Oct 04, 2017 (LBO) – Sri Lanka’s Finance Ministry on Wednesday signed an agreement to modernize and improve the efficiency of country’s financial sector which in turn will help small businesses and entrepreneurs compete in the markets and create better jobs. The new Financial Sector Modernization Project (FSMP) is financed through a 75 million dollar loan from the International Development Association (IDA) of the World Bank. The project was signed today by World Bank Country Director for Sri Lanka Idah Pswarayi-Riddihough, and Treasury Secretary R.H.S. Samarathunga. The loan for this project is provided by the IDA, the World Bank’s grant and low-interest arm, with a maturity of 25 years that includes a grace period of five years. This 5 year project will be implemented via the financial sector regulators - Central Bank; Securities and Exchange; and Insurance Board of Sri Lanka.

“Efficient financial markets can boost the competitiveness of Sri Lankan firms and overall job creation,” said Pswarayi-Riddihough.

“Sri Lankan authorities must continue effectively addressing challenges in the financial sector; such as gaps in financial sector infrastructure, weak legal frameworks, and in oversight functions of the regulators.” Financial intermediaries and regulatory institutions stand to benefit from modernized regulatory frameworks and the state-of-the-art financial infrastructure that will ease access to affordable finance and spur an entrepreneurship culture in Sri Lanka.