Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractSri Lanka has achieved a high level of financial inclusion compared to other South Asian countries. Its financial sector comprises a wide range of financial institutions providing financial services such as loans, savings, pawning, leasing and finance, and remittance and money transfer facilities. There is also evidence that a larger share of households in Sri Lanka accesses multiple financial institutions for their credit and savings needs. However, the use of insurance services, ATM facilities, e-payments, and mobile banking, is relatively low. Financial education is ad hoc and lags behind financial innovation and new products. The information technology (IT) literacy rate is only 35% in Sri Lanka, and with the growing IT-finance nexus, financial awareness and education have become all the more important. Strengthening the regulatory framework governing the microfinance sector and client protection is also crucial for improving financial inclusion in Sri Lanka. Much scope remains to improve financial inclusion, particularly related to cost and quality of financial services provided, and the sustainability of financial institutions.

In recent years, there has been an increase in multiple borrowing in the microfinance sector in Sri Lanka, while many microfinance institutions (MFIs) have experienced high levels of borrower turnover, deteriorating portfolio quality and weak financial performance. This has raised concerns about the microfinance sector. However, the debt levels for the majority of borrowers remain at moderate levels, while a number of mitigating factors such as mobilization of borrower savings by MFIs, wide use of pawning among clients and a reduction in donor funds to the sector suggest that a microcredit bubble in Sri Lanka is unlikely in the near future. JEL: G23, G32

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I5Icycles', that is, at different levels of development. It refers to the literature on special agglomeration of industry and industrial districts, and argues that a textile or apparel enterprise cannot remain competitive in isolation. In this context, it emphasizes on developing linkages among various components of the textiles and clothing sector within Bangladesh.The study finally examines current trade and industrial policy instruments such as tariff and non-tariff measures and export incentives, as well as incentives for promoting industrial linkages. The study emphasizes on the need for making trade and industrial policy instruments coherent and consistent with the stage of industrial development. It argues for initiating a shift from assembly-type operations to exports of high-value-added products with the aim of developing a well-integrated textiles and clothing industry.The study is an important contribution to the existing literature on the subject. It is comprehensive in its coverage of issues pertaining to the textiles and clothing sector. It also provides various policy insights, especially from the point of view of Bangladesh. The study could have been richer and more balanced if the limitations of the applied computable general equilibrium empiricism were also taken note of On the issue of labour productivity and wages, the study could have adjusted wage rates for labour productivity levels by calculating unit labour cost. At the policy level, it could have also explored the possibilities of adopting the approach of the regional integrated textiles and clothing sector in the South Asian region by emphasizing on vertical integration of production activities in this sector. Explorations into the concept of a regional textiles and clothing cluster in the South Asian region could form the future research agenda on the subject in the context of potentially heightened global competition.

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