Eric Lavertu, ambassador of France to Sri Lanka and S. Renganathan, MD of Commercial Bank of Ceylon (CBC), exchanging financing agreements between Proparco and Commercial Bank of Ceylon
Proparco, a subsidiary of Agence Française de Développement (AFD) Group dedicated to private sector financing, signed an agreement with Commercial Bank of Ceylon last week. 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).
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. Supporting SMEs is consequently central to the Sri Lankan Government’s economic development strategy.
Commercial Bank of Ceylon (CBC) was set up in 1920 and is the leading private bank in Sri Lanka. It is today the leader in financing entrepreneurs and SMEs, thanks to its products tailored to the needs of SMEs. CBC has also stood out in recent years for its skills development program, which has benefitted to over 2000 entrepreneurs since 2015. The bank has also launched a program for women entrepreneurs, which has already been followed by 850 of them.
The Bank has also established 16 Agriculture and Microfinance Units (AMFU) around the country to groom micro entrepreneurs the future SMEs by providing continuous financial and nonfinancial services. Annually Bank conduct capacity building/financial literacy programmes to over 1000 micro entrepreneurs as non-financial services. 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 sectors including water and sanitation, urban development, energy, and irrigation. With this project, AFD Group's investments in the country will cross 850 million euro.
Buddhi K Athauda
Ambassador of Sri Lanka to France/Spain/Portugal/Monaco
Permanent Delegation to UNESCO