In New Delhi:
Minakshi Seth
Phone: + (91) 11 4111 1000
Email: mseth@ifc.org


Sri Lanka, November 27, 2007 - IFC, a member of the World Bank Group, will implement an innovative development program for small and medium entrepreneurs in Sri Lanka. Funded by Norway, the Southern Chambers Access to Finance and Advisory Services Program will target members of five chambers of commerce in the country’s southern region: Hambantota, Matara, Galle, Monaragala, and Ratnapura.

Access to loans is one of the top concerns for SMEs in Sri Lanka, according to several studies. Smaller businesses are often seen as inherently risky and unstable; hence banks tend to demand extensive fixed collateral as security, commonly up to 200 percent of the loan amount. The country’s banks lack skills in managing a portfolio of small projects, often relying on strict rules for collateral instead.

Royal Norwegian Embassy officials, Ambassador, Mr. Tore Hattrem – Ambassador and First Secretary, Ms. Ingrid Dana joined the launch for the innovative program at Hambantota today.

Speaking at the launch, Anil Sinha, General Manager, IFC Advisory Services for South Asia said, “This program represents a new milestone in IFC’s and the Norwegian government’s shared vision for SME development.”

The new program builds on a series of discussions that IFC has had with chamber officials, SME entrepreneurs, and bankers to identify ways to improve access to credit and financial services and promote SME growth in the country’s southern region.

Gilles Galludec, IFC Country Manager in Sri Lanka, explains, “Improving banks’ efficiency and capacity for serving small and medium enterprises, enhancing the knowledge of their staff, and developing and distributing new SME products will be important parts of this program.”

IFC aims to strengthen the access and quality of services that banks and other institutions provide to small and midsize businesses. One key component will be an access to finance strategy through which five leading private sector banks in Sri Lanka—Commercial Bank, DFCC, Hatton National Bank, NDB, and Sampath Bank—will work with IFC to enhance their SME banking activities in the region.  

A second key component of the program is advisory services to help SMEs in the South to become bankable businesses. IFC will assist the five chambers of commerce in providing technical advice, training, guidance, and market information to their members. An important objective is to provide solutions to address the lack of collateral, to raise awareness and knowledge of banking services for the SME sector and to help bring banks and businesses closer.

The Norwegian government has committed funding of $2.5 million for IFC to implement the project over three years. IFC will build on successful experience with designing and implementing sustainable programs for SME development in emerging markets worldwide.

About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.

About IFC SouthAsia Enterprise Development Facility
The IFC SouthAsia Enterprise Development Facility in Sri Lanka, a $5 million facility funded by IFC and the governments of Netherlands and Norway, is part of a multidonor-funded facility managed and operated since 2006 by IFC. It helps increase access to finance and quality business development services to projects in the country. IFC SEDF also helps create a business-enabling environment and supports value addition to firms through tailored advisory services, capacity building programs, training, and research.