NCGI loan guarantees have surpassed 2,000 within just 15 months of operations, helping facilitate more than Rs. 14 billion in collateral-free loans for small and medium-sized enterprises (SMEs) across Sri Lanka.
NCGI loan guarantees boost SME financing Sri Lanka with collateral-free loans
The National Credit Guarantee Institution (NCGI) marked the milestone while officially opening its new office on the seventh floor of HNB Towers in Colombo on Monday. The ceremony also featured the symbolic presentation of the institution’s 2,000th credit guarantee, highlighting the rapid expansion of a programme designed to improve access to finance for businesses that lack traditional collateral.
Implemented with the support of the Asian Development Bank (ADB) and the Ministry of Finance, the guarantee scheme has become an important financing mechanism for entrepreneurs who often face challenges securing bank loans despite having viable business plans. Through NCGI loan guarantees, more than Rs. 14 billion has already been channelled to SMEs operating across a wide range of sectors.
The institution has ambitious growth plans for the remainder of the year and expects to double the number of beneficiaries to around 4,000 by year-end, further expanding access to SME financing Sri Lanka while supporting entrepreneurship and economic development.
NCGI began operations in January 2025 by issuing its first credit guarantee for an agricultural project in Uva Province. Since then, the programme has expanded steadily, with the highest number of beneficiaries recorded in the Western, Southern, and Northern Provinces.
The institution has also prioritised inclusive financing. Around 20% of all guarantees issued to date have supported women-owned businesses, while approximately 24% have been directed towards priority sectors including agriculture, information technology, tourism, and export-oriented enterprises.
Addressing the opening ceremony, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe said the Government intends to further strengthen Sri Lanka’s financial sector by establishing a Development Bank and reinforcing the country’s cooperative banking system.
He noted that some had previously questioned whether initiatives such as collateral-free loans could succeed in Sri Lanka, but the institution had demonstrated that such programmes could be implemented effectively and credibly.
Abeysinghe said the Government has identified several structural issues within the financial sector, particularly the need to improve access to finance for entrepreneurs who lack sufficient collateral despite having commercially viable projects.
“We are pleased with the progress made so far. We now have the opportunity to expand the volume of loans and increase the number of beneficiaries. We believe this institution will continue to strengthen its services and play an even greater role in the future,” he said.
The Deputy Minister also revealed that the Government is working closely with the United Nations Development Programme (UNDP) and the Asian Development Bank to develop sustainable solutions for challenges facing Sri Lanka’s microfinance sector and the equity financing constraints experienced by many entrepreneurs.
Highlighting the importance of innovation in financial services, he noted that Sri Lanka’s private banking sector extended approximately Rs. 2.1 trillion in loans to the private sector last year and encouraged banks and financial institutions to introduce more innovative financing solutions for entrepreneurs and growing businesses.
He further emphasised that despite numerous economic challenges, Sri Lanka’s export sector continues to demonstrate resilience and growth. Supporting entrepreneurs through expanded SME financing Sri Lanka, he said, remains a key pillar of the Government’s strategy to stimulate investment, generate employment, and reduce poverty.
The event was attended by several senior government and financial sector representatives, including Central Bank Governor Dr. Nandalal Weerasinghe, NCGI Chairman and Deputy Secretary to the Treasury Sanjaya Mudalige, Chief Executive Officer Jude Fernando, Additional Director General Chamila Karunaratne, ADB Senior Financial Sector Specialist Manohari Gunawardena, senior banking executives, representatives of chambers of commerce, and other distinguished guests.
With more than Rs. 14 billion already facilitated through NCGI loan guarantees, the institution is emerging as an important catalyst for entrepreneurship, helping businesses access financing without conventional collateral while supporting Sri Lanka’s broader economic recovery and private sector development.