The public sector is a key driver of private sector development across Asia’s developing member countries simply because from a development perspective it makes good economic sense.

Sri Lanka is an excellent example of how this works at its best.

The Colombo government has been proactive about strengthening the financial sector, and over the past year, ADB has approved two important operations, namely a Small and Medium-Sized Enterprises (SMEs) Line of Credit Project in January and a Capital Markets Development Program in October.

Both public sector operations have as goals mobilizing finance for the private sector. A third operation in the 2017 pipeline is to establish an SME Credit Guarantee Institution to further catalyze lending to SMEs.

Despite Sri Lanka having in place the foundations for SME lending—including a Secured Transactions Act, registries for both immovable and movable property, and other important infrastructure.