Micro, small, and medium enterprises (MSMEs) remain the backbone of Sri Lanka’s economy, contributing over 52% to GDP and employing 45% of the workforce as of 2024. With a legacy of supporting rural development and entrepreneurship since the 1980s, MSMEs have evolved through various government initiatives, including the SME Bank, Samurdhi microfinance, and the National SME Policy Framework.
Currently, there are around 1.1 million MSMEs in Sri Lanka. While they make up more than 90% of all businesses, only 10% contribute to exports. Most operate in the services sector, followed by agriculture and manufacturing, with regional disparities in distribution. The sector still faces major hurdles—68% lack access to finance, 52% are held back by complex regulations, and digital adoption remains low despite the rise in social media use. Over 60% of MSMEs also operate informally, restricting access to credit and public support.
Looking ahead to 2030, Sri Lanka aims to grow the number of MSMEs to 1.4 million, increase their GDP contribution to 60%, and expand exports to 25%. Digitalisation is central to this vision, with initiatives like the Digital SME Empowerment Roadmap aiming to digitally enable 60% of MSMEs by 2027. Sustainability and inclusivity are also key, with support for green businesses and efforts to raise women-led MSMEs from 25% to 40%.
Recent national programmes—such as Enterprise Sri Lanka Revival, SME incubators, GovPay, LankaQR, and youth-focused entrepreneurship schemes—showcase the government’s commitment to the sector. To truly unlock their potential, Sri Lanka must improve access to finance, encourage formalisation, boost digital skills, foster innovation, and enhance export capacity.
With a strong strategic push, MSMEs can drive Sri Lanka’s transition toward a more inclusive, resilient, and innovation-driven economy.