ECONOMYNEXT \u2014 Sri Lanka\u2019s cabinet has approved entering into an agreement with the Asian Development Bank (ADB) to obtain a 200 million US dollar loan to support micro, small, and medium-sized enterprises (MSMEs).<\/p>\n
The facility will finance \u2018Sub-program 1\u2019 of the Sector Development Program, which focuses on building a robust and inclusive financial ecosystem for MSMEs. <\/p>\n
The Department of External Resources has concluded formal loan negotiations with the ADB to acquire the funds.<\/p>\n
The 200 million dollar loan will be drawn from the ADB\u2019s ordinary capital resources and is divided into two equal tranches of 100 million US dollars each. <\/p>\n
One tranche will serve as policy-based lending, while the other provides financial intermediation lending.<\/p>\n
The financing falls under a broader framework approved on March 16, 2026, to conduct negotiations for up to 620 million US dollars across five sub-programs to support Sri Lanka\u2019s reform agenda aligned with the International Monetary Fund\u2019s (IMF) Extended Fund Facility.<\/p>\n
Responding to questions from journalists on why Sri Lanka is securing 200 million dollars after seeking approval for 620 million dollars, cabinet spokesperson Nalinda Jayatissa clarified:<\/p>\n
\u201cApproval has been granted for the entire 620 [million]. Accordingly, depending on how negotiations progress and based on the case we present, the loan is disbursed,\u201d Jayatissa said.<\/p>\n
Jayatissa noted that discussions were held to secure the 200 million dollar loan under two distinct repayment frameworks.<\/p>\n
The 100 million dollar policy-based component carries a 12-year repayment period with a three-year grace period. <\/p>\n
The remaining 100 million dollar financial intermediation component has a 15-year repayment period alongside a five-year grace period. (Colombo\/Nov10\/2026)<\/p>","protected":false},"excerpt":{"rendered":"
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