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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2732

USAID Supports Sri Lanka’s Small Business Community

Colombo, 14 July, (Asiantribune.com):The U.S. Agency for International Development (USAID) has entered into an agreement with the Lanka Orix Leasing Company (LOLC) to provide a $3 million loan portfolio guarantee for micro, small, and medium-sized business activities in the agriculture, fisheries, tourism, and renewable energy sectors in the Eastern, North Central, and tsunami-affected areas of the Southern Province.An LOLC officer hands over a cow to a dairy farmer in Polonnaruwa.  The cow was financed as part of USAID’s $3 million loan portfolio guarantee for micro, small and medium-sized business activities. ( Photo: LOLC)An LOLC officer hands over a cow to a dairy farmer in Polonnaruwa. The cow was financed as part of USAID’s $3 million loan portfolio guarantee for micro, small and medium-sized business activities. ( Photo: LOLC)

“Many of these businesses are unable to prosper because of lack of access to capital,” said USAID Mission Director Rebecca Cohn. “This hinders the growth of small businesses and contributes to continuing poverty and frustration among the population.

Entrepreneurs in the South and in the East have been especially hard hit, first by the tsunami and now by the country’s escalating conflict.”

With average credit amounts ranging from $1,000 to $20,000 USD, anywhere from 150 to 3,000 businesses will benefit from new equipment and much needed working capital from the loan guarantee program. The program will reach borrowers at many levels, from farmers and small-scale producers all the way up to medium-sized agricultural-based enterprises, such as food processors.

“This is also the first time USAID, anywhere in the world, is using its partial credit guarantee to cover leasing,” Ms. Cohn adds. “Leasing offers an important way to assist the country’s agricultural sector because it allows farmers, fishermen, and producers to finance assets such as tractors, fishing boats, and other equipment over a longer period of time, therefore making it more affordable.”

Since 1999, USAID worldwide has established over 115 credit guarantees in 42 countries. These credit guarantees cover lenders’ investments up to 50 percent of principal, and have been used to cover loans or loan portfolio amounts of $1 million up to $40 million worldwide.

- Asian Tribune -

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