23 March 2018 09:52 am
Senkadagala Finance PLC has entered into a loan agreement with International Finance Corporation (IFC), a member of the World Bank Group to borrow US $ 15 million, a stock exchange filing said.
The company said the loan proceeds will be utilized to grow its loan book for women entrepreneurs.
According to IFC, the loan will allow Senkadagala Finance to provide financing to women-owned micro, small and medium-sized enterprises (WMSMEs) and the project is expected to directly fund around 2,500 such businesses, which would create between 1,500-4,650 new employment opportunities.
IFC said in total Sri Lankan women entrepreneurs are in need of US $ 350 million in finances. The World Bank, in its recent Development Update, said that small enterprises and especially the WMSMEs are facing difficulties in raising finances due to biases from financial institutions, as most WMSMEs do not have significant assets to pledge as collateral and even if they do, the collateral required is higher than the norm.
Of the total number of employers in Sri Lanka, just 10 percent are women, according to the Institute of Policy Studies (IPS).
An IPS study published last September on WMSMEs in the spice and coir industries found that 53 percent of the obstacles in these firms were related to liquidity and other financial problems.
Further, less than 37 percent of women in Sri Lanka were engaged in economic activities, according to the Census and Statistics Department (DCS) survey for the third quarter of 2017, leaving a large portion of economic potential untapped.
Even among the economically active women, just one percent were employers and unemployment was higher among women than men. Around 80 percent businesses in Sri Lanka are small and medium enterprises—led mostly by men—which are biased against employing females, according to the government.
A Department of Census and Statistics survey released in January showed that the top reasons for this situation, according to the employers, were family commitments and maternity duties of women, along with concerns related to dedication to work and absenteeism among women.