CBSL Policy Support and SME Relief Fuel Lending Momentum
Credit Growth Accelerates in Early 2025
Sri Lanka’s private sector credit growth continued its upward trajectory, surpassing Rs. 8.5 trillion by the end of April 2025. Outstanding credit rose from Rs. 8,414.6 billion in March to Rs. 8,501.6 billion in April, reflecting a Rs. 87 billion increase and a year-on-year growth rate of over 15%.
This follows steady monthly gains, with credit rising Rs. 158 billion in March, Rs. 105 billion in February, and Rs. 87 billion in January. In December 2024 alone, credit demand spiked by Rs. 193 billion, pushing the year-end total to Rs. 8,156 billion.
Policy Easing Drives Expansion
The Central Bank of Sri Lanka (CBSL) attributes the strong credit growth to continued policy easing, including a 25 basis point cut to the Overnight Policy Rate in May. Lower interest rates and improved market conditions have boosted lending across sectors, with expectations of sustained expansion through 2025.
SMEs Get Additional Relief
To further support recovery, the CBSL has extended relief measures for SMEs. Licensed banks have been directed to offer concessions—such as interest relief and new lending—to eligible borrowers who began revival discussions before 31 March 2025. The deadline for loan rescheduling agreements has been extended to 30 June 2025.
These measures are expected to reinforce overall credit growth and aid the broader economic recovery.