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Credit guarantee schemes in Sri Lanka
01.12.1998
Many small and medium manufacturing businesses were under threat in the late 1970s when Sri Lanka ended its protectionist policies in favour of a more open economy. To address this, the Central Bank began a series of credit guarantee schemes with the aim of inducing banks to lend to otherwise risky SMEs. This article describes how the schemes have changed, introducing features to reduce the default rate and to make the guarantee fund self-financing.