IFC invests $ 166 million to support Sri Lankan businesses, drive economic growth
Daily FT: Reinforcing its longstanding commitment to Sri Lanka’s private sector, the International Finance Corporation (IFC), a member of the World Bank Group, yesterday announced a high-impact investment programme of $ 166 million to support Sri Lankan businesses and accelerate the country’s transition from economic stabilisation to sustainable growth.
This comprehensive country-level financing package aims to expand financial access for small and medium-sized enterprises (SMEs), with a focus on empowering women-owned businesses and the agri-business sector. By targeting these key areas of Sri Lanka’s economy, the financing seeks to drive inclusive growth and unlock job opportunities for underserved groups.
This investment has been made strategically in three of Sri Lanka’s leading commercial private banks – Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB) – comprising a $ 50 million loan, $ 80 million in Risk Sharing Facilities (RSFs), and $ 36 million in trade finance support.
While SMEs account for over 75% of all Sri Lankan businesses and 45% of jobs, access to credit remains a significant barrier to their expansion. Aligned with both the World Bank Group and key national priorities, this partnership aims to deliver targeted solutions for SMEs, helping businesses overcome challenges and supporting the country’s long-term economic resilience.
IFC Regional Industry Director – Financial Institutions Group (Asia and the Pacific) Allen Forlemu said: “SMEs are the undisputed backbone of Sri Lanka’s economy, and their growth is essential for creating jobs. During periods of crisis, the IFC plays a critical counter-cyclical role by stepping in when private capital pulls back – and this investment in Sri Lanka’s financial sector reflects that commitment. By helping banks channel capital to women-led businesses, smallholder farmers, and the sectors driving recovery, we are enabling Sri Lanka not just to rebound, but also to grow forward with greater resilience and inclusivity.”
IFC Regional Division Director for South Asia Imad Fakhoury said: “As part of our One World Bank Group approach, the IFC is dedicated to unlocking new inclusive financing streams and ensuring that prosperity reaches the front lines of Sri Lanka’s economy. Strengthening the country’s financial ecosystem means equipping banks with the capacity, tools, and confidence to extend finance where it is most needed – from expanding trade finance capabilities to modernising digital transaction systems. In partnership with three leading banks, NTB, CBC, and NDB, our investments aim to build a foundation that empowers SMEs and communities to plan ahead, withstand future shocks, and participate fully in the opportunities that a competitive, inclusive economy can deliver.”
The IFC’s financing of $ 50 million to NTB marks the first IFC-funded debt investment in Sri Lanka’s financial sector following the 2022 economic crisis. Of the total financing, $ 7.5 million or 15% is earmarked for on-lending to women-owned SMEs, enabling greater access to credit for women entrepreneurs.
Further, the IFC has partnered with CBC and NDB to establish up to $ 80 million in RSFs. Under the facilities, which consist of $ 60 million for CBC and $ 20 million for NDB, the IFC will share 50% of the principal losses incurred by the banks on a portfolio of eligible SME loans. This strategic intervention will help accelerate the banks’ strong commitment to expanding lending to SMEs, including to women-owned SMEs and agri-businesses. These facilities are supported by the International Development Association (IDA) Private Sector Window Blended Finance Facility, through the Small Loan Guarantee Program (SLGP), a programmatic approach to de-risking and scaling up financing for SMEs in eligible countries, including Sri Lanka.
The IFC’s Global Trade Finance Programme (GTFP) will provide a $ 36 million trade finance facility guarantee to NTB and NDB, strengthening their trade finance capabilities. The trade finance lines consist of up to $ 20 million for NTB and $ 16 million for NDB and aim to enhance the banks’ ability to provide underserved sectors with access to global markets and supply chains.
World Bank Group Sri Lanka and Maldives Country Manager Gevorg Sargsyan said: “As Sri Lanka rebuilds following multiple shocks – including the recent devastation caused by Cyclone Ditwah – the IFC’s collaboration with leading financial institutions is instrumental in addressing urgent needs while laying the foundation for long‑term competitiveness. These investments send a strong signal of confidence to the market.”
OSL take:
The latest IFC investment is indicative of the growing business potential in Sri Lanka as well as the confidence in the country’s economic resilience and growth. The investment made to three local commercial banks to support local businesses and economic growth would help further expand the country’s ongoing economic activities. Also, Sri Lanka has a strong banking network, which is a prerequisite for a country on the path to becoming a regional hub. All these serve to boost Sri Lanka as an emerging business destination in the South Asian region and supported by the country’s geographical positioning in the Indian Ocean as well as strong trade ties with many foreign countries, foreign businesses/investors could confidently explore the expanding business/investment opportunities in key economic sectors and related fields. Foreign businesses could also look at expanding operations in Sri Lanka through partnerships or joint ventures with local businesses given the strength, growth and profits recorded by a majority of Sri Lanka’s private sector.
| Article Code : | VBS/AT/20260205/Z_3 |