Sri Lanka : Strengthening the Regional Development Bank Project
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 Details
-
Project Officer
Gunawardhena, Manohari
South Asia Department
Request for information -
Country/Economy
Sri Lanka -
Sector
- Finance
| Project Name | Strengthening the Regional Development Bank Project | ||||||||
| Project Number | 52219-001 | ||||||||
| Country / Economy | 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 | 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) |
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| Project Outcome | |
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| 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) | Output 1: Achieved. Board approved the deposit product on February 2021. Product Liyasawiya (savings product) was launched on 8 March 2021. Ongoing. $50 million was disbursed, out of which $40 million has been liquidated as of 24 November 2022. Achieved. 3,036 women-led businesses have been funded. Output 2 Achieved. Strategy paper completed and to be incorporated in RDB's corporate plan. Achieved. 5 November 2021 letter from the General Manager of RDB confirmed achievement and sample print screen of the report was provided. Achieved. ADB-approved environmental and social management systems is uploaded in ADB's website. Achieved. Approved by RDB's ALCO on March 2021. 5 November 2021 letter from the General Manager of RDB confirmed that the new ALCO reporting was implemented. Output 3 Ongoing Ongoing. 204 women clients have been trained as of 24 November 2022. |
| 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 |
| 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 | 13 Dec 2022 |
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 | 30 Jun 2023 | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 50.00 | Cumulative Contract Awards | |||
| ADB | 50.00 | 17 Feb 2023 | 50.00 | 0.00 | 100% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 17 Feb 2023 | 50.00 | 0.00 | 100% |
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 | 30 Jun 2023 | - |
| 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 | 17 Feb 2023 | 596,351.49 |
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.
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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: Environmental Monitoring Report (January-December 2022) | Environmental Monitoring Reports | Dec 2022 |
| Strengthening the Regional Development Bank Project: Environmental Monitoring Report (January-December 2021) | Environmental Monitoring Reports | Dec 2021 |
| 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.
ADB Expanding Access to Credit for Micro and Small Rural Enterprises in Sri Lanka
ADB has approved a $50 million loan to the Regional Development Bank of Sri Lanka to provide affordable and accessible credit to rural micro, small, and medium-sized enterprises (MSMEs) in the country.
Tenders
Contracts Awarded
| Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | 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 | 197,754.00 | — |
Procurement Plan
None currently available.