IFC, Sanasa boosting financial inclusion in Sri Lanka

Thursday, 3 October 2013 00:00 -     - {{hitsCtrl.values.hits}}

Micro, small and medium enterprises or MSMEs are critical to Sri Lanka’s economy, contributing up to 52% of the country’s GDP. Estimates have shown that over 98% of all enterprises in Sri Lanka can be categorised as micro, small and medium enterprises. However, small businesses in Sri Lanka often face a lack of access to financial services, which limits potential and hinders growth. Financial inclusion, through increased access to a variety of financial services is key to promoting the growth of small businesses. To support small and medium business owners, IFC, a member of the World Bank Group, is working with the SANASA Movement on several projects that are helping to increase access to financial services to those that need it the most – micro and small scale entrepreneurs and farmers living in lagging regions of the country. The SANASA movement, representing a cooperative approach to community empowerment and mobilization, is focused on catering to the needs of lower income groups. Through this partnership, IFC has worked with Sanasa Development Bank to strengthen its operations and expand its network, to reach over a million micro and small businesses by the end of 2012. IFC has also invested in the bank to reach more people through increased access to finance and job creation across Sri Lanka. IFC is also working with the SANASA Movement’s insurance company to develop flexible, affordable weather index-based agricultural insurance products in Sri Lanka to minimise the impact of crop losses due to floods or droughts. Through these products, IFC and Sanasa Insurance have expanded access to insurance for 15,000 small farmers in this first phase, offering protection against weather-related risks and natural disasters for their food crops. The project has also raised awareness among 50,000 farmers on the availability and benefits of these index-based insurance products. As Sri Lanka looks to maximise its growth potential, small farmers and entrepreneurs play a vital role in boosting economic growth and job creation. Financial institutions and other private sector players will need to increasingly focus on innovative and wide-reaching business solutions to support financial inclusion and ensure that economic growth is sustainable. IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $ 25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.