RDB Bank: Empowering the SME sector in Sri Lanka

SMEs is called as the driving force of the economy where it accounts for 75% of businesses, 52% of GDP and 45% of employment. As the premier state owned development bank in Sri Lanka spanning 272 strong branch network island wide has been dedicating to provide accessible finance its clientele. RDB bank started focusing SME lending in 2013 where it has been evolving gradually and has become a MSME specialized bank at present with 20 SME centers by districts and specialized trained officers who have been assigned to SME Centers and have capacity of evaluating SME credit proposals independently. In addition, bank supports for solving business problems and enhancing technical capacity.

Regional development is a key factor in achieving macroeconomic objectives of the country and in line with this objective, RDB is playing a key role in achieving objectives through varies means to cater our clientele. In nutshell, special awareness programmes for enriching financial literacy , project management for SMEs, marketing strategies for SMEs , a special women entrepreneurs business development programme in partnership with ADB where more than 500 women were trained under this programme and Training of Trainers ( ToT) Programmes for internal employees conducted were very much useful in sustaining this endervarance. SEILAMA which is an unique social platform has enabled in networking products and promoting products through different marketing channel.

SME lending is one of the services that RDB has been providing brings a significant role by providing accessible finance in line with RDB’s vision. “To Be the Trusted Development Financing Partner to the Nation”. These SME Loan Scheme make lending for varies objectives such as investment purposes, working capital purposes. In particular, there are concessionary SME loan schemes available at RDB has been successfully operating in island wide.

Bank is highly concentrating on development lending by way of funding in terms of bank’s fund or refinance funds. A few loan schemes are mentioned below.

• Re-energizing MSMEs at concessionary interest rate for investment purposes such purchase of machinery and equipment, renovation of business.
• Small and Medium Line of Credit 02 (SMELoC2) supports for working capital requirement.
• RDB Solar Scheme and E-Friend support for encouraging renewable energy which will enable business firm to connect to national grid.

In fulfilling sustainable development goals by 2030, RDB is dedicated to adapt to sustainability framework which highlights 3Ps (People, Planet and Profit). "Do the right thing, for the right reason, at the right time for a sustainable future.” Stepping towards sustainability in a bank means having a more conscious approach to make rational financial decisions. As a national level bank, RDB is stepping into sustainable strategies with the establishment of the bank's “Sustainability Unit. RDB is in the progress in introducing Green Deposits and Green Loans.

RDB are introducing new digital platform to perform financial transactions with the collaboration of LankaClear which is entrusted by Central Bank of Sri Lanka to implement and LANKAQR enables customers to pay merchants directly from their bank accounts using any of LANKAQR compliant mobile payment app available. There are mass range of benefits when using QR transaction and it is fast, secure and low cost digital transactions with zero investment for SMEs.

Furthermore, VISA Debit Card has been launched as another digital payment experience for our customers, which will help enhance their digital literacy through exclusive discount schemes.

In addition to performing core functions, RDB uses the concept of correspondent banking to accept deposits, lend requirements and provide a wide range of financial and non-financial services to needy SMEs. Agent banking provides limited scale banking and financial services to the under-served business segment through registered door to door agents on behalf of a bank, rather than a teller/ cashier.

Since its inception, RDB bank has been able to uplift quality of living standards of our clientele over 3 decades. However, challenges in business environment is significantly hitting to our clientele since most of them are low and middle income earners. Despite challenges, bank has been able to survive in the economy because of business strategies that the bank has adopted for sustainable way.