USAID partners with local banks to increase lending for small businesses

Sept 07, 2018 (LBO) – US Agency for International Development (USAID) has partnered with Sri Lankan banks to announce nine million US dollars worth financing program for micro, small and medium-sized enterprises (MSMEs). Hatton National Bank and Sampath Bank have already partnered with this seven-year program to address the current lack of financing to key borrower groups. This partnership will be supported by USAID's YouLead program that strengthens employability and self-employment opportunities for youth in Sri Lanka.

The signing of this agreement took place on September 5, 2018, in Colombo.

"We at USAID are proud to encourage private sector lending in key sectors that are vital to the economic development of Sri Lanka," said Reed Aeschliman, Mission Director for USAID Sri Lanka. "Increasing access to credit enables youth entrepreneurs to improve their own lives, and helps small and medium enterprises to spur further economic growth in their respective regions." The program represents a crucial step toward enabling Sri Lanka's private sector and youth entrepreneurs to access capital, expand businesses, and, ultimately, to create more jobs. The agreement will unlock critical resources that will help spur innovation, foster investment, and provide critical resources to under-served segments of Sri Lanka's economy including existing MSMEs and start-ups. “Given HNB’s extended legacy of facilitating growth and development in the MSME sector, we are conscious of the immense potential and vital need for access to finance,” said Jude Fernando, HNB Deputy General Manager – SME and Mid-Market. “Today’s partnership between HNB, USAID, and Sampath Bank represents a vital step forward in our collective mission in enhancing economic opportunities for young Sri Lankans.” HNB and Sampath Banks' strategies align well with the purpose of this partnership. Both banks have extensive outreach and experience and are well positioned and committed to increasing MSMEs and start-up lending. "We at Sampath Bank believe in entrepreneurship development at all levels and development finance has been a major area of lending for us,” said Tharaka Ranwala, Senior Deputy Managing Director of Sampath Bank.

“As such, we welcome this scheme which will provide better access to much-required capital for the new entrepreneurs and it aligns well with our own entrepreneurship development initiative." In Sri Lanka, the U.S. Government has invested more than 320 billion Sri Lankan rupees (two billion US dollars) to benefit its people since 1956.