ADB’S microfinance programme to reach Sri Lanka with additional funding

Sri Lanka’s microfinance space is likely to benefit from the additional funding the Asian Development Bank (ADB) has committed to its microfinance programme.

An ADB communiqué said the development lender’s board of directors has raised the limit of an existing microfinance risk participation and guarantee programme by an additional US $100 million in assistance for its microfinance institutions (MFIS).

“ADB’S additional financing will help the programme expand into new markets in the region, such as Myanmar, Pakistan, and Sri Lanka,” the communiqué said.

The programme has been successful, supporting growth and employment opportunities for over 3 million borrowers across Asia and the Pacific to-date.

“Giving small businesses and entrepreneurs access to finance is one proven tool to improve livelihoods and reduce poverty,” said Sabine Spohn, Senior Investment Specialist in ADB’S Private Sector Operations Department.

“ADB will continue to expand its support for those at the bottom of the pyramid by increasing the size and scope of the microfinance programme.”

The microfinance programme is implemented through a risk participation and guarantee structure.

Under the programme, ADB selects partner financial institutions that provide local currency loans to Adb-approved MFIS. ADB risk participates or partially guarantees the default risk of these MFIS, thereby catalyzing private sector participation and mobilizing additional funds for them.