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Development Finance Corporation

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Women at clothing factory.
Through DFC, 134 loans went to women-owned businesses in Sri Lanka at the end of the first quarter of 2021.
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Overview

The U.S. International Development Finance Corporation (DFC) is America’s development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. DFC also provides financing for small businesses and women entrepreneurs to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights. USAID facilitates DFC’s credit guarantee partnership with a local bank to provide financing to private, micro-, small-, and medium-sized enterprises throughout Sri Lanka. This activity helps youth entrepreneurs to access capital, expand businesses, and, ultimately, create more jobs. 

Implementing Partner: USAID Development Credit Authority (now U.S. International Development Finance Corporation); Total Estimated Cost: $3 million; Performance Period: September 2018 – September 2025

Objectives

Through loan guarantees, USAID partners with the U.S. International Development Finance Corporation (DFC) to:

  • Lower the risks for financial institutions to lend to promising businesses, individuals, and small enterprises across different sectors.
  • Improve access to productive loans to develop well-paying jobs, new economic opportunities, and sustainable, long-term development.

Areas of Focus

  • The DFC portfolio in Sri Lanka includes a credit guarantee facility with Hatton National Bank. The objective of this facility is to improve access for credit for SMEs, including start-up businesses. This facility guarantees up to a maximum 60% of eligible loans for startups and 50% for existing businesses.

Results

  • Between October 2020 and March 2021, the U.S. International Development Finance Corporation (DFC, formerly the Development Credit Authority) provided 316 small business loans to Sri Lankan businesses, including to 23 new start ups, through a credit guarantee with the local, private Hatton National Bank (HNB). At the end of the first quarter of 2021, the value of those loans totalled approximately $300,000. Approximately 42 percent of loans (134) went to women-owned businesses and 74 percent of loans (236) went to SMEs in northern and eastern areas of the country that are recovering from past conflict.

 

Last updated: May 05, 2022

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