Sri Lanka extends 235 million rupees in working capital to MSMEs

The Sri Lankan Government provided 235 million rupees to Micro, Small, and Medium Enterprises under its Non-Performing Loan working capital loan scheme, according to a progress statement on the 2026 MSME spending package released by the Ministry of Finance yesterday.

By early third quarter, the country spent over 80 per cent, amounting to 75 billion rupees, of the 95 billion rupee allocation set aside earlier this year to address losses suffered by MSME businesses during Cyclone Ditwah in December 2025.

Central Bank of Sri Lanka officials previously discussed introducing a cap on MSME interest rates due to concerns over businesses struggling with interest payments following multiple economic shocks, while Committee on Public Finance Chairperson Harsha de Silva noted the sector’s total debt burden exceeded one trillion rupees.

The Ministry confirmed 342 MSMEs completed loan restructurings to resume operations, and the National Credit Guarantee Institution issued guarantees worth approximately 9,650 million rupees for 2,143 loans, covering a total loan value of nearly 14,000 million rupees across all districts.

Between late 2025 and early 2026, cyclone-affected businesses received loan subsidies at a three per cent interest rate, with micro-entrepreneurs eligible for up to 250,000 rupees, small-medium scale entrepreneurs up to one million rupees, and medium to large scale firms up to 25 million rupees.

The Ministry of Industry and Entrepreneurship Development registered 5,639 micro enterprises, 4,636 small businesses, and 2,986 medium scale firms for post-cyclone compensation, as the Ministry of Finance actively explores allocating provisions for similar concessionary loan schemes in 2027.