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COLOMBO, SRI LANKA, JANUARY 23, 2003—
Why is it so difficult for small and medium enterprises to get financing? Banks think they cannot make money by lending to small businesses—either because they are competing with government schemes, which give subsidized funds, or because they feel that small businesses will default.
To overcome these misconceptions, the International Finance Cooperation, the private sector arm of the World Bank Group, and the Dutch government through the IFC Technical Assistance Trust Fund, will organize a symposium January 23-24 in Colombo to share IFC’s experience—both in facilitating access to finance for small businesses and stimulating growth in the sector. The symposium was preceded by a mapping exercise of the state of the sector; issues highlighted in the mapping exercise will be discussed.
This is the first small business symposium to be organized by IFC in Sri Lanka and will bring bankers and finance specialists from Australia, Bangladesh, India, the Netherlands, and Sri Lanka together with IFC officials.
Through its various donor-supported project development facilities in emerging markets (
http://www2.ifc.org/sme/html/dev__facilities.html
), IFC has successfully supported small businesses and helped private banks to build up lending through sustainable methods that do not require subsidized funding from governments. Due to improved efficiencies and the introduction of new techniques in loan processing, lending by banks to small businesses has finally become profitable. It is a situation where everybody wins—banks earn enough income to be in operation for a long time, small businesses pay less for the money they borrow and get better and quicker services, and governments can use their scarce resources for other purposes.
Assaad Jabre, IFC’s vice president of operations, and H.E. Susan Th. Blankhart, the Netherlands ambassador in Sri Lanka, will open the symposium. A. S. Jayawardena, governor of the Central Bank of Sri Lanka, will give the keynote address.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
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