ICTA, PwC pave way for innovative tech companies to raise much needed funds with minimal collateral
The Information and Communication Technology Agency (ICTA), the apex body for Information and Communication Technology in Sri Lanka, in collaboration with PwC Sri Lanka, yesterday introduced a new Credit Evaluation Framework to be adopted by lenders when lending to tech companies with minimal collateral.
The new framework was launched in an event held with the participation of Prof. Lalith Gamage – Chairman of ICTA, Mahinda B.Herath – Chief Executive Officer ICTA, Anura De Alwis – Chief Digital Economy Officer of ICTA, Kavinda Weerakoon, Director – Deals, PwC Sri Lanka, Ashok Goonesekere Chief Risk Officer DFCC Bank, Indika Ranaweera, Vice President – SME, Middle Market & Business Banking, NDB Bank and Kanishka Weeramunda, Founder/CEO of Paymedia (Pvt) Ltd. a technology company who has successfully gone through the evaluation process.
Expansion of a tech company is a daunting process due to challenges in obtaining debt facilities, as traditional credit evaluation methods require borrowers to provide tangible collateral in order to be eligible for a business loan. Furthermore, technology companies are evaluated using existing generic credit evaluation frameworks, which have inherent shortcomings in evaluating the merits and demerits of a technology company. Against this backdrop, the launched framework becomes an alternative mechanism for the traditional framework. The new framework has been built around four pillars, namely; Founder, Market, Product, and Financials and has thus provided technology companies to be evaluated on quantitative and qualitative factors that are most relevant to them.
The framework has been formulated with the due support and consultation from an industry-leading steering committee which consisted of Mr. Mangala Karunaratne – CEO, Calcey Technologies (Pvt) Ltd, Mr. Chalinda Abeykoon – CEO, Lankan Angel Network, Mr. Nilendra Weerasinghe – Head – Chief Corporate Advisory Officer, NDB Investment Bank Limited, Mr. Wellington Perera – Director, Cemex Software(Pvt.)Ltd., Ms. Jayomi Lokuliyana – CEO, ZMessenger (Pvt) Ltd.
Commenting on the new framework, ICTA Chairman Prof. Lalith Gamage said, “ICTA, as the apex body for IT industry, is proud to launch this novel credit evaluation method, which is a timely approach to support emerging tech startups and existing tech companies to expand their businesses at a time when the tech startup ecosystem started to revive the country’s economy, it is vital to extend financial support for the growth of these tech companies, also considering their huge export capacity. This alternative credit evaluation process will enable tech companies to access funding without the need to rely on personal collateral”.
It is noteworthy that the framework has been designed with the recommendations of credit evaluation officers from several banks in order to streamline the mechanism further. Seylan Bank, DFCC Bank, Union Bank, and NDB bank have already expressed their willingness to consider the new framework when assessing technology companies for debt financing.
Chief Digital Economy Officer of ICTA, Anura De Alwis, said, “Technology industry is core to the country’s economic growth with the highest potential for employment opportunities. But most tech companies are faced with difficulties in obtaining loans due to a lack of physical collateral. Moreover, the pandemic has forced many challenges for tech companies, derailing the growth to some extent. In this background, the new framework launched with PwC will play a crucial role in boosting the tech industry. We are thankful to PwC for partnering with us to design the new framework and for the expert advice and guidance from the steering committee in making the whole process a success.”
Kavinda Weerakoon, Director – Deals at PwC Sri Lanka, expressed, “Technology enterprises are generally underserved by banks which create a funding gap for these businesses. We are thankful for ICTA in pioneering this valuable initiative and having PwC onboard. PwC brought in deep banking sector insight from a cross-functional team of experts to develop this framework. We are optimistic that this framework will act as a catalyst for lending institutions to provide flexible and innovative financing facilities to develop high-impact technology-driven sectors of the economy.”
SL needs laser-like focus on IMF programme implementation: Dr. Indrajit Coomaraswamy
‘If it gets suspended, it would have pretty dramatic consequences’
by Sanath Nanayakkare
There are three most important priorities for Sri Lanka in the wake of the IMF Programme; implementation, implementation and implementation of the agreed upon benchmarks of the programme. Last thing we need to suddenly find is that we have gone off the track of the programme and it is suspended, Dr. Indrajit Coomaraswamy, Former Governor, Central Bank of Sri Lanka said on Friday.
He said so while giving the keynote speech at a Central Bank hosted webinar titled “What is next for Sri Lanka in the wake of IMF Programme?”
Deshal De Mel, Economic Advisor, Ministry of Finance, Murtaza Jafferjee, Managing Director, JB Securities, Bingumal Thewarathanthri, Chief Executive Officer, Standard Chartered Bank were the panelists at the forum where the moderator was Shiran Fernando, Chief Economist at the Ceylon Chamber of Commerce
The following are a few comments made by Dr.Coomaraswamy.
The IMF EFF has now been successfully negotiated. This is in some way the beginning. There is lot more to do. It’s time to start thinking about what happens next. A little under a year ago, there were acute shortages of the most essential good. There were long queues and one or two people passed away while in queue. Prices were skyrocketing and exchange rate was collapsing, inflation was spiking and the Central Bank had to push up interest rates. All this happened only a few months from where we are today. The fact that things have stabilized to a significant extent clearly is a very favourable outcome but actually there is no room for complacency because the stabilization has happened at a low-level equilibrium.
It has happened when the economy experienced a 7.6% contraction last year. It was better than what was anticipated by the IMF and the World Bank, but still it is a very sharp contraction. And we need to get to a situation where we have macro-economic stability with a growth rate of about 4%. There is a lot to be done for this. But this is a very commendable place to get to after all. The Paris Club comprising G7 countries has endorsed our efforts to restore debt sustainability. The non-Paris Club creditors such as India and China also have endorsed and supported our efforts too. So the largest countries and creditors are willing to support Sri Lanka to get back on track in terms of debt sustainability. So this is not a bad place to be.”
“IMF programme implementation has always been a weakness on our part. This time we have already done a lot as prior action but there is more as you would have seen from the documentation tabled in parliament including structural reforms and institutional reform. So we have to have laser-like focus on implementation and move forward with the programme. If the programme gets suspended, it would have pretty dramatic consequences. So we need to keep it on track. We can’t give up the absolutely compelling need for fiscal discipline. What is next for us is; discipline and making the needed economic policy and implementing what e have agreed to do. During our past IMF programmes, the issue was lack of implementation by the Sri Lankan authorities.
Earlier this week Dr. Chandranath Amarasekare, Executive Director at the CBSL arranged for the Irish authorities to brief Sri lankan authorities on the implementation unit set up in Ireland when the global financial crisis hit Ireland which led them to go into an IMF programme. Ireland was meticulous in the way they set up the implementation framework. They identified all the action that had to be taken and assigned parts of it to relevant government entities to implement them. Ireland is back on track now. We need to have the same degree of laser-like focus on implementing the benchmarks. We have to figure out what needs to be done and ascribe responsibility for each action and monitor
carefully how we are going about it. We have to make sue we are hitting all the targets and structural benchmarks as we go along. These are embedded in the IMF programme. Last thing we need is to suddenly find that we have gone off the track of the programme and the programme is suspended. That will constrain the inflows to the country and it will affect the confidence beginning to build up now. All that will get undermined if the programme gets suspended because we are not able to keep it on track. So the Implementation Unit will need a very good authority to reach out to any part of government and get things done. We need this Implementation Unit to be well-structured and running well. And it should have the authority of the President behind it,”he said.
Exterminators PLC opens a training and R&D center
Exterminators PLC, Sri Lanka’s premier pest tech and environmental tech company, opened a 5,000 plus square foot training, research and development center to enhance the quality of service via in-depth innovation to create a circular economy inorder to meet the growing demand in environmentally sustainable public health pest management, agricultural pest management, livestock, plantation and landscape pest management, sanitation and disinfection services in Sri Lanka and emerging and developing markets. The facility includes simulated environments for training in pest management, termite management, mosquito management, sanitation and disinfection, health and safety for new recruits and continuous professional training and development for existing employees.
The company plans to provide training for international pest management professionals in emerging and developing countries as well as serve as a training facility for its strategic franchising partners in the region.
SLT-MOBITEL ‘Hosting Cub’ for MSMEs enables critical infrastructure and value-added hosting services
Understanding the importance of supporting Micro, Small, And Medium-Sized Enterprises (MSMEs) to drive growth and efficiencies, SLT-MOBITEL, the National ICT Solutions Provider is offering its Hosting Cub – Shared Web Hosting service catering to vital hosting requirements.
SLT-MOBITEL provides hosting facilities for MSMEs with affordable pricing, easy expansion of MSMEs cyber presence and other value-added offerings via its Shared Hosting and Virtual Private Server (VPS) solutions.
The Shared Hosting proposal is offered as the most economical option available for hosting. The overall cost of server maintenance is shared, also catering to low traffic websites that do not require higher bandwidth such as smaller websites and blogs.
The Share Hosting solution is available via four levels – Stellar, Stellar Plus, Stellar Pro and Stellar Business. The ‘Stellar’ package 1 GB VSAN Disk Space to balance storage usage, monthly 20 GB Bandwidth, 2 Mbps speed, 10 websites allowed, secure connection through SSL, FTP Accounts to manage file transfers, Unlimited email accounts, Unlimited MySQL Database to manage data, Unlimited Sub Domains, Hosting in SLT’s state-of-the-art Data Centre and WordPress supported. The pack is priced at only Rs 7500 per annum.
Similarly, the Stellar Plus presents an enhanced package with 2 GB VSAN Disk Space, monthly 40 GB Bandwidth, approval of 15 websites in addition to all the other value-additions. It is priced at Rs 12,000 per year. The Stellar Pro delivers 3 GB VSAN Disk Space, monthly 100 GB Bandwidth and 30 websites allowed while the Stellar Business provides 5 GB VSAN Disk Space, monthly 150GB Bandwidth and 40 websites. All other features are also enabled. The costs for Stellar Pro and Stellar Business are Rs 16,500 and Rs 25,500 respectively, per annum.
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