ICTA/PwC introduces new Credit Evaluation Framework for Tech Companies
The Information and Communication Technology Agency (ICTA), the apex body for Information and Communication Technology in Sri Lanka, 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 Chairman of ICTA Prof. Lalith Gamage, Chief Executive Officer ICTA Mahinda .B. Herath, Chief Digital Economy Officer of ICTA Anura De Alwis, Director - Deals, PwC Sri Lanka Kavinda Weerakoon, DFCC Bank Chief Risk Officer Ashok Goonesekere, Vice President – SME, Middle Market and Business Banking, NDB Bank and Founder/ CEO of Paymedia (Pvt) Ltd Kanishka Weeramunda.
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.
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 start-up 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”. PwC Sri Lanka Director - Deals Kavinda Weerakoon said, “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.