ADB receives US $ 12.6mn grant from We-Fi to promote Lankan women entrepreneurs

The Asian Development Bank (ADB) has received US $ 12.6 million of funding for 2018-2020 from the Women Entrepreneurs Finance Initiative (We-Fi) to generate more resources for Sri Lankan women-led businesses.

The grant—one of three awarded under the inaugural call for proposals—enhances ADB’s support for women-led small and medium-sized enterprises (SMEs), vital for economic growth and job creation in Sri Lanka.

“The We-Fi financing supports ADB’s SME Line of Credit Project to foster a better environment for female entrepreneurship and strengthens women’s skills and capacities to run successful enterprises,” said ADB Financial Sector Specialist Amanda Tan. 

“ADB commits to support women’s entrepreneurship, through comprehensive approaches that address major barriers such as access to finance, policies and business capacity development.”
In Sri Lanka, female participation in the labour force at 40 percent is significantly lower than for men (75 percent). Unemployment rates are also significantly higher for women. 

There is also a large gender gap in the share of women who are unpaid family workers, which account for 20.4 percent of women, compared to 3 percent of men.

SMEs contribute about 45 percent of Sri Lanka’s gross domestic product and provide about half of the country’s jobs. Yet, among SMEs, only 25 percent of entrepreneurs are women. 

Their lower capacity contributes to the US $ 350 million gender credit gap. Capitalizing on entrepreneurship to economically empower women and generate inclusive growth in Sri Lanka will require reducing various bottlenecks, especially access to finance.

ADB’s board of directors approved a US $ 100 million loan in 2016 for the SME Line of Credit Project, followed by additional loan financing of US $ 75 million in January 2018 to further encourage local partner banks to grow their SME portfolios—particularly to enterprises that are outside Colombo or women-led.

Apart from providing wider access to finance to SMEs, the project also develops innovative SME financing schemes, while building SMEs’ capacity, particularly in information and communications technology, business process outsourcing, fruits and vegetables, as well as processed food and beverages.

The We-Fi-funded programme in Sri Lanka complements ADB’s 2016 project, which targets women and underserved populations. It expects to mobilize US $ 25.3 million of financing to reduce barriers faced by the women entrepreneurs, including private sector investments of up to US $ 2.1 million.
The programme will strengthen institutional capacity within financial institutions to be more women-friendly, remove policy and regulatory barriers, build female entrepreneurs’ skill sets, encourage female entrepreneurship through communications and awareness campaigns and strengthen the evidence base to inform future policymaking. The grant directly supports more than 400 women-led SME borrowers and will train at least 250 women.

We-Fi is governed by 14 founding contributing countries and is managed by the World Bank. It aims to mobilize more than US $ 1 billion in commercial and international financial institution finance to afford women entrepreneurs access to debt, equity, venture capital, insurance products and other opportunities to link with domestic and global markets. The aim is to improve the business environment for women-owned or led SMEs. 

The ADB programme is aligned with three objectives of We-Fi— reducing financial constraints faced by women-owned or led SMEs, mitigating other nonfinancial constraints and increasing the capacity of women-owned or led SMEs to access markets.