MICROCAPITAL BRIEF: Central Bank of Sri Lanka Launches National Finance Inclusion Strategy

The Central Bank of Sri Lanka (CBSL), with assistance from the World Bank Group’s International Finance Corporation (IFC), recently launched a National Finance Inclusion Strategy (NFIS). The strategy has four primary goals: “increase access to digital finance and payments, boost access to finance for MSMEs [micro-, small and medium-sized enterprises], protect financial consumers, and improve financial literacy.” The action steps include boosting data collection, expanding infrastructure and reducing regulatory barriers. As part of the financial literacy component, there will be foci on: (1) youth via changes to school curricula; and (2) women, as a CBSL survey conducted in 2018 determined that “62 percent of Sri Lankan women were aware of financial transactions through mobile phones, yet only 32 percent were comfortable using the technology.”

Mahinda Rajapaksa, Prime Minister of Sri Lanka, stated, “I believe this strategy will complement the government’s efforts to minimize the provincial income disparities, [to reduce] urban-rural inequalities, and to promote inclusive growth.”

Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, IFC reported total assets of USD 95.8 billion.

Established in 1950, CBSL seeks to ensure the stability of the nation’s financial sector as well as its economy as a whole. The central bank’s gross reserves totaled approximately USD 7.1 billion as of July 2020. Professor W D Lakshman was appointed governor of the institution in 2019 and continues to serve in that capacity as of 2021.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2021, it has 189 member nations. The group encompasses: (1) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) the International Finance Corporation; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2020, the World Bank Group disbursed funds totaling USD 54 billion.

By Tejas Gumudavelly, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26228

IFC homepage
https://www.ifc.org

CBSL homepage
https://www.cbsl.gov.lk/

World Bank homepage
https://www.worldbank.org/en/home

National Finance Inclusion Strategy text
https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/NFIS%20Summary_%20English_2.pdf

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