The project would provide long-term financing that would directly fund $50 million of subloans to micro and small enterprises outside of Colombo and be structured to provide the regulatory capital that would leverage an additional $533 million of lending.
| Project Name | Strengthening the Regional Development Bank Project | ||||||||
| Project Number | 52219-001 | ||||||||
| Country | Sri Lanka |
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| Project Status | Active | ||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Inclusive economic growth |
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| Drivers of Change | Gender Equity and Mainstreaming Knowledge solutions Partnerships Private sector development |
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| Sector / Subsector | Finance / Small and medium enterprise finance and leasing |
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| Gender Equity and Mainstreaming | Effective gender mainstreaming | ||||||||
| Description | The project would provide long-term financing that would directly fund $50 million of subloans to micro and small enterprises outside of Colombo and be structured to provide the regulatory capital that would leverage an additional $533 million of lending. | ||||||||
| Project Rationale and Linkage to Country/Regional Strategy | The national development strategy of the Government of Sri Lanka targets achieving upper middle-income status with improved equity and protection of the vulnerable by 2025. Creating one million new jobs in the formal economy and increasing the labor force participation rate, mainly with micro, small, and medium-sized enterprises (MSMEs), are cornerstones of the strategy. MSMEs have higher growth potential, create more jobs, and, over time, increase the tax base at a quicker pace than larger enterprises. Because of their distribution across the whole country, they also contribute to reducing stubborn regional inequalities. Access to finance is a key challenge for MSMEs, which face constraints to affordable financing both on the demand side, such as poor commercial viability and difficulty in meeting lending requirements of financial institutions, and on the supply side, such as financial institutions having operations poorly designed for MSMEs and an overreliance on collateral-based loans. As a result, only 30% of Sri Lankan firms have sufficient access to bank loans and other capital. Relative to its peer countries, this puts Sri Lanka last in South Asia and 31st among the 32 developing member countries of the Asian Development Bank. These constraints are even greater for MSMEs that are led by women or located in rural areas. |
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| Impact | MSME access to finance enhanced (Vision 2025) | ||||||||
| Project Outcome | |
|---|---|
| Description of Outcome | RDB''s capacity to serve its client MSMEs strengthened |
| Progress Toward Outcome | Ongoing implementation. |
| Implementation Progress | |
| Description of Project Outputs | RDB''s operations expanded RDB''s operational capacity strengthened Capacity of MSEs to access financial services enhanced |
| Status of Implementation Progress (Outputs, Activities, and Issues) | 1a. In Progress. TA consultants have completed the deposit mobilization report and submitted for Board approval on 6 August 2020. Board approval awaited. 1b. In Progress. $25 million was disbursed, out of which $13 million has been liquidated. 1c. In Progress. 2a. In progress. TA consultants have completed the strategy report and submitted for Board approval on 9 April 2020. Board approval awaited. 2b. In progress. 2c. Achieved. ESMS was approved by ADB and RDB board approved on 3 June 2020. Disclosed in ADB webpage. 2d. In progress. TA consultants have completed the asset-liability committee report and submitted for Board approval on 4 May 2020. 2e. In progress. TA consultants have completed the loan origination training program and submitted for Board approval on 26 October 2020. 3a. In progress. TA consulting firm has been recruited and working on the white paper. 3b. In progress. TA consulting firm is being recruited. |
| Geographical Location | Nation-wide, Colombo |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI-C |
| Indigenous Peoples | FI-C |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Business Opportunities | |
|---|---|
| Consulting Services | not applicable |
| Procurement | not applicable |
| Responsible ADB Officer | Gunawardhena, Manohari |
| Responsible ADB Department | South Asia Department |
| Responsible ADB Division | Public Management, Financial Sector and Trade Division, SARD |
| Executing Agencies |
Regional Development Bank 933, Kandy Road, Wedamulla, Kelaniya, Sri Lanka |
| Timetable | |
|---|---|
| Concept Clearance | 07 Sep 2018 |
| Fact Finding | 04 Sep 2018 to 07 Sep 2018 |
| MRM | 11 Oct 2018 |
| Approval | 14 Feb 2019 |
| Last Review Mission | - |
| Last PDS Update | 14 Dec 2020 |
Loan 3774-SRI
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 14 Feb 2019 | 14 Jun 2019 | 10 Oct 2019 | 30 Jun 2022 | - | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 50.00 | Cumulative Contract Awards | |||
| ADB | 50.00 | 14 Feb 2019 | 0.00 | 0.00 | 0% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 14 Feb 2019 | 25.00 | 0.00 | 50% |
TA 9711-SRI
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 14 Feb 2019 | 09 Mar 2019 | 09 Mar 2019 | 28 Feb 2022 | 31 Mar 2022 | - |
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 0.00 | 1,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,000,000.00 | 14 Feb 2019 | 195,919.97 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
| Title | Document Type | Document Date |
|---|---|---|
| Strengthening the Regional Development Bank Project: Periodic Environmental Performance Reports for Subprojects (January-December 2020) | Environmental Monitoring Reports | Jan 2021 |
| Strengthening the Regional Development Bank Project: Environmental and Social Management System Arrangement | Environment and Social Management System Arrangements | Jun 2020 |
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
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ADB Expanding Access to Credit for Micro and Small Rural Enterprises in Sri Lanka
ADB has approved a $50 million loan to the Regional Development Bank of Sri Lanka to provide affordable and accessible credit to rural micro, small, and medium-sized enterprises (MSMEs) in the country.
Tenders
| Tender Title | Type | Status | Posting Date | Deadline |
|---|---|---|---|---|
| Research study on digital engagement | Firm - Consulting | Closed | 14 May 2020 | 04 Jun 2020 |
| Credit Scoring Implementation Firm | Firm - Consulting | Closed | 08 May 2020 | 14 May 2020 |
| White Paper on Government Micro, small and medium-sized enterprise support programs | Firm - Consulting | Closed | 04 Apr 2020 | 15 May 2020 |
| Senior MSME Finance Policy Advisor | Individual - Consulting | Closed | 04 Apr 2020 | 10 Apr 2020 |
| SRDB TA - White paper on government micro, small and medium-sized programs | Firm - Consulting | Closed | 23 Jan 2020 | 29 Jan 2020 |
| Digital Finance Expert | Individual - Consulting | Closed | 11 Dec 2019 | 06 Jan 2020 |
| SRDB TA - International Banking advisor and team leader | Individual - Consulting | Closed | 16 Mar 2019 | 22 Mar 2019 |
| SRB TA - National Safeguards Expert | Individual - Consulting | Closed | 16 Mar 2019 | 29 Mar 2019 |
| SRDB TA - Banking | Firm - Consulting | Closed | 13 Mar 2019 | 22 Apr 2019 |
| SRDB TA - Women Entrepreneurship Training | Firm - Consulting | Closed | 13 Mar 2019 | 15 Apr 2019 |
Contracts Awarded
| Contract Title | Approval Number | Contract Date | Contractor | Contractor Address | Executing Agency | Contract Description | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
|---|---|---|---|---|---|---|---|---|
| Capacity Development | Technical Assistance 9711 | 15 Oct 2020 | Pricewaterhousecoopers - Sri Lanka(SRI LANKA) | 100, Braybrooke Place, Colombo 2, Western Sri Lanka, Sri Lanka | Regional Development Bank | 141,087.00 | — | |
| Capacity Development | Technical Assistance 9711 | 19 Aug 2019 | ERNST & YOUNG (SRI) (SRI LANKA) | 201, DE SERAM PLACE, COLOMBO 10 COLOMBO, WESTERN PROVINCE, SRI LANKA | Regional Development Bank | Consulting Services | 197,754.00 | — |
Procurement Plan
None currently available.