Sri Lanka launched a Secured Transactions Registry (STR), for small and medium enterprises (SMEs) which enables greater credit access through movable collateral, as part of a collective effort led by the Credit Information Bureau (CRIB), in collaboration with the Central Bank of Sri Lanka and the Ministry of Finance, with technical assistance from the International Finance Corporation (IFC), a member of the World Bank Group.
The initiative also includes funding support from the European Union’s regional initiative ‘Accelerating Climate Smart and Inclusive Infrastructure in South Asia’ (ACSIIS), which has also been listed.
“Historically, borrowers in Sri Lanka, particularly MSMEs, have encountered significant barriers in accessing formal credit sources. This has been primarily due to their inability to provide fixed asset collateral and the absence of standardised credit practices. To address these challenges, the reforms to the legal and institutional framework governing movable collateral, seeks to establish an enabling environment that allows borrowers, especially MSMEs, to unlock the value of their movable assets,” said Secured Transaction Registration Authority Chairperson Chaaminda Bandara.
“The launch of the Secured Transactions Registry marks a transformative milestone in Sri Lanka’s credit ecosystem. By enabling the use of movable assets as collateral, the STR expands access to finance for SMEs and entrepreneurs who have traditionally been constrained by the lack of immovable assets. This initiative reinforces CRIB’s commitment to fostering financial inclusion and strengthening the digital credit infrastructure of the country,” said Credit Information Bureau of Sri Lanka Director/General Manager Pushpike Jayasundera.
“Empowering SMEs is critical for creating jobs and sustaining economic momentum in Sri Lanka. A strong and efficient credit infrastructure is essential in unlocking the growth potential of these businesses and transforming the financial sector. IFC has been proud to contribute its expertise throughout every phase of this reform, and look forward to also supporting greater awareness for uptake. These efforts, backed by both public and private sectors, are poised to unlock enormous potential and drive lasting progress for generations to come,” said Country Manager for World Bank Group in Sri Lanka and Maldives Gevorg Sargsyan.
The STR will feature simple and inclusive rules for establishing security interests, a fast and efficient database/filing system, and procedures and legal protections in case of default, including enforcement and repossession rights.