ADB approves US $ 100mn to strengthen financial stability in SL

The Asian Development Bank (ADB) has approved a US $ 100 million loan to address the complex and challenging structural reforms in Sri Lanka’s financial sector, through better governance, continued policy reforms and enhanced financial inclusion.

This loan builds on the structural reforms addressed in the previous two ADB lending programmes, totalling US $ 400 million, since the country’s economic crisis in 2022. It will support the culmination of the previous reform efforts, focusing on the completion and long-term sustainability of the measures aimed at enhancing the financial sector’s resilience and continuing service delivery.

“The ADB is proud to support Sri Lanka’s continued efforts in strengthening the financial sector,” said ADB Country Director for Sri Lanka Takafumi Kadono. 

“This initiative builds on the earlier banking sector reforms and aims to broaden access to finance for micro, small and medium-sized enterprises, with a strong focus on empowering the women-led enterprises. We remain committed to working alongside the government to promote long-term financial stability and drive sustainable development.”

The programme will strengthen stability, capital adequacy, risk management and governance of the banking sector, thereby strengthening the financial regulators to be better equipped and prepared to manage a financial crisis. This will help boost public confidence in the financial system and safeguard public interest. The programme will also promote financial inclusion, while promoting sustainability to help enhance financial intermediation and the flow of credit to the end-borrowers.

The programme’s overarching development objective is fully aligned with the country’s strategy of maintaining finance sector stability amid the economic crisis, while ensuring the sustainability of the banking sector’s resilience. Further, the programme aims to enable improved access to finance for businesses across diverse sectors of the economy.

The ADB is a leading multilateral development bank supporting inclusive, resilient and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, the ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure and safeguard our planet. Founded in 1966, the ADB is owned by 69 members—50 from the region.