The Asian Development Bank (ADB) said it has approved a $165 million loan to Sri Lanka to provide immediate financing support for small and medium-enterprises (SMEs), which have been severely affected by the coronavirus disease (COVID-19) pandemic, and long-term financing to underserved SMEs, including businesses led by women and tea smallholders.

COVID-19 has gravely hit Sri Lanka’s economy due to the decline in demand and supply chain disruption in export-oriented industries, which has led to an economic slowdown that gradually spread across other sectors. Financial support is critical for SMEs to revive their businesses, which account for over 45% of total employment and 52% of gross domestic product of Sri Lanka.

The new financing will build on the ongoing Small and Medium-Sized Enterprises Line of Credit Project, which ADB approved in 2016 to strengthen SMEs’ access to finance. The project is co-financed with a grant from the G20-led Women Entrepreneurs Finance Initiative (We-Fi) since 2018 to promote women entrepreneurship.

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