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PayMedia secures funding worth Rs. 85 m from NDB

15 Jul 2021

The Information and Communication Technology Agency (ICTA) recently unveiled a credit scoring framework as part of its efforts to support start-ups. Developed in partnership with PwC (PricewaterhouseCoopers), the framework helps banks identify the creditworthiness of start-ups that apply for loans. The initiative addresses a fundamental issue that has hindered the growth of Sri Lankan tech start-ups. Recently, local fintech start-up PayMedia secured an Rs. 85 million loan from National Development Bank (NDB) as the bank adopted this framework. Since its founding in 2014, the start-up has worked closely with the banking industry. Despite its close relations with the banks, it was a time-consuming process to get funding from them. Elaborating on this, PayMedia Founder Kanishka Weeramunda said: “It can take anywhere between four to six months to get a response. After four months, then you’ll hear, ‘we’ll fund 50% of the project’. But as a start-up, you can’t do anything with that because you need the remainder too.” The new credit scoring framework helps bridge the gap between Sri Lankan banks and start-ups. ICTA had developed it working with PwC alongside an industry-led steering committee. The framework evaluates start-ups based on four key factors: Capability of the founders and management team, market potential of the start-up, its product/service, and financial health of the start-up. By focusing on these four factors, it’s now possible for banks to analyse a start-ups’ intangible assets when assessing its creditworthiness. Several banks have started looking at implementing the framework to give loans to start-ups. Among the first banks to adopt it is NDB. Speaking to Arteculate, NDB Manager – Kohuwala Branch Kuraish Sappidin commented: “This framework is a positive move from the ICTA and PwC for the growth of the banking industry. It offers a great opportunity for start-ups to work with the banks and grow their business.” As a start-up founder, Weeramunda described the framework as a game-changer, and thanks to it, PayMedia secured an Rs. 85 million loan from NDB. Commenting on this, he went on to share: “In the past, funding from banks was out of the question for start-ups. The most viable option was giving up equity to investors. But now a founder doesn’t need to give up equity or provide collateral to obtain funding.”


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