ICTA, PwC introduces Credit Evaluation Framework to support Tech Companies | Daily News

ICTA, PwC introduces Credit Evaluation Framework to support Tech Companies

Some of the participants at the event
Some of the participants at the event

The Information and Communication Technology Agency (ICTA), in collaboration with PwC Sri Lanka, recently 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 and Business Banking, NDB Bank and Kanishka Weeramunda, Founder/CEO of Paymedia (Pvt) Ltd. a technology company.

The framework has been formulated with the due support and consultation from an industry-leading steering committee.

ICTA Chairman Prof. Lalith Gamage said, “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”.

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, “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.”

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 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.”

Explaining the prominence of PayMedia, a rapidly evolving Financial Technology (Fin-Tech) company in Sri Lanka, being granted a loan from NDB Bank, Founder Kanishka Weeramunda said, “Starting your own company can be a daunting but rewarding process. It gives hope to other similar tech companies and startups who would otherwise have to swap equity or offer collaterals to fund their business.”

Kanishka added, “The entire process took place during the second wave of the COVID-19 pandemic. Following this, we were asked to present our case for obtaining the loan. In less than three weeks, we were given the approval, and the loan was granted.”

 


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