Credit Rating Industry in Sri Lanka

kani and Rajapakse R P C R (2019) " Cresit rating Industry in Sri Lanka " Iconic Research and Engineering Journal Volume 2 Issue 8 pp42-59

18 Pages Posted: 24 May 2019 Last revised: 1 Jun 2020

See all articles by R. P. C. R. Rajapakse

R. P. C. R. Rajapakse

University of Sri Jayewardenepura

Nelkani Mayakaduwa

affiliation not provided to SSRN

Date Written: February 13, 2019

Abstract

An efficient financial system facilitates the optimal allocation of resources towards economic development of a country by allocating resources efficiently. Markets which are a part of the financial system, support efficient allocation of funds, thus development of capital markets play a vital role in economic development of a country. Information asymmetry and lack of information can fear away investors, while a “credit rating” assigned by an independent party can attract investors to markets. The purpose of this study is to identify the current trend of the credit rating industry in Sri Lanka (SL). Data were obtained mainly from interviews and other secondary sources such as annual reports of SEC, and rating reports etc. Quantitative data were analyzed using; ratio analysis and percentage calculations, while qualitative data were analyzed using content analysis. The study revealed that underdeveloped capital markets and low financial literacy hinder the use of credit ratings in SL influencing negatively on investments.

Keywords: Credit Ratings, Credit Rating Agencies, Sri Lanka

JEL Classification: D53, E44, G10

Suggested Citation

Rajapakse, R. P. C. R. and Mayakaduwa, Nelkani, Credit Rating Industry in Sri Lanka (February 13, 2019). kani and Rajapakse R P C R (2019) " Cresit rating Industry in Sri Lanka " Iconic Research and Engineering Journal Volume 2 Issue 8 pp42-59, Available at SSRN: https://ssrn.com/abstract=3333573

R. P. C. R. Rajapakse

University of Sri Jayewardenepura ( email )

Nugegoda
Gandodawila
Gangodawila, Nugegoda 10250
Sri Lanka

Nelkani Mayakaduwa (Contact Author)

affiliation not provided to SSRN

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