ADB approves $200 million loan to strengthen Sri Lanka’s financial sector

The Asian Development Bank (ADB) has approved a $200 million loan to support Sri Lanka in strengthening its financial sector.

This loan, part of the second phase of ADB’s Financial Sector Stability and Reforms Program, aims to build on the stabilization efforts introduced in 2023 to help the country recover from its economic crisis.

The loan will fund key reforms to improve governance in the financial sector, enhance the capacity of financial institutions, and strengthen regulatory frameworks.

A major focus is on boosting the resilience of Sri Lanka’s financial system and expanding access to finance, which will support long-term economic growth.

As part of these reforms, the Central Bank of Sri Lanka (CBSL) will strengthen its supervision of banks.

This includes improving the early warning system to identify potential weaknesses in banks and using stress tests to monitor financial stability.

The reforms will also support small and medium-sized enterprises (SMEs), particularly those led by women, with special loan incentives and policy frameworks to improve access to finance.

The ADB has been working closely with Sri Lanka to introduce structural changes in the financial sector, aiming to improve financial inclusion and support the country’s recovery.

This loan is part of ADB’s broader goal of fostering a prosperous, resilient, and inclusive region.