ADB boosts SMEs with Rs. 20 bn support 

The local SME sector will receive a fresh boost to improve and expand operations with the Asian Development

Bank (ADB) agreeing to provide working capital support.
 The entity, which promotes social and economic development in Asia, will provide relief to the existing micro, small, and medium scale enterprises by way of credit facilities, the Department of Government Information said.

 Via licensed specialized banks, Rs. 20 billion will be provided to these enterprises at concessional interest rates.
 Rs. 15 billion will be used to strengthen existing and new enterprises, while the remaining amount of Rs. 5 billion will be used to support enterprises under the non-performing loan category.
 On Monday, cabinet nod was given to implement the project.

 Meanwhile, speaking at a media gathering last week, ADB Country Director Takafumi Kadono shared that there is a focus on women entrepreneurs and SMEs that are engaged in activities in the climate space, that is climate adaptation or mitigation. Support will also be given to the government to make equity infusion.
 “This is an important initiative because banks here lend on collateral and SMEs dont have that. This and the national credit guarantee institution will help alleviate that,” he said.

 “So we are trying to help the government through our policy reforms support in financial stability, that is to establish Micro-credit Regulatory Authority and other means.
 He shared that ADB is also looking to expand support to SMEs in terms of access to technology and capacity building.
 “Because it’s not just the collateral. They need to be able to produce business plans or submit financial reports. All these things are quite challenging for SMEs. So these are support we plan to give,” said Kadono.