Sri Lanka approves over Rs. 31 billion in SME loans in Q1 2026
The Morning: Sri Lanka’s state-backed financing for small and medium enterprises surpassed Rs. 31 billion in the first three months of 2026, according to a social media post made by Deputy Minister of Industries and Entrepreneurship Development Chathuranga Abeysinghe on 17 April.
According to the social media post, more than 5,000 businesses received approved loans during the three-month period, supported by 35 national guarantee approvals and Rs. 200,000 in grants.
According to Abeysinghe, the Q1 2026 progress report, titled: “Driving Industrial Recovery and Transformation,” also highlighted the completion of the Ditwah industry recovery programme, a targeted relief effort for businesses affected by the recent cyclone.
On the international front, according to Abeysinghe, the government has completed a joint study with the United Nations Development Programme (UNDP) focused on last-mile connectivity and microfinance. A World Bank-backed “Fund of Funds” for the startup and venture capital ecosystem is now underway, while negotiations with the International Monetary Fund (IMF) for growth-phase support continue.
Abeysinghe also revealed that the Expression of Interest (EOI) process for the National Phosphate Company has been completed, while EOIs have been initiated for Kahatagaha Graphite and Kurinchatthavu Salt.
The social media post by Abeysinghe detailed grant schemes for exporter standards and Good Manufacturing Practice (GMP) compliance, impact assessments conducted by the Industrial Development Board (IDB) across 243 large and medium industries, and coordinated fuel supply continuity with the Ceylon Petroleum Corporation (CPC). A pilot project on import substitution for school shoes has also accordingly been completed.
OSL take:
Sri Lanka’s increasing support for SMEs is driving a notable increase in economic activity, signaling renewed momentum in key sectors in the country. With state-backed financing exceeding Rs. 31 billion in early 2026 and thousands of businesses gaining access to credit, SMEs are playing an increasingly central role in industrial recovery, job creation, and domestic production. This expansion is also creating a more attractive environment for foreign businesses/investors. Strengthened financing mechanisms, targeted recovery programmes, and initiatives such as import substitution and export standardization are improving the competitiveness of local industries. For foreign businesses/investors, Sri Lanka now presents emerging opportunities across key economic sectors like manufacturing, agribusiness, value-added exports, and startup investments.
| Article Code : | VBS/AT/20260422/Z_2 |