Collateral-Free Loans Now a Reality for Sri Lanka’s Small Businesses

COLOMBO (News 1st); Sri Lanka launched  the National Credit Guarantee Institution Limited (NCGIL) on Monday (2) in Colombo.

The initiative is aimed at enabling micro, small, and medium enterprises (MSMEs) to access finance without the need for collateral.

NCGIL was established through a Public-Private Partnership (PPP) between the Government of Sri Lanka and 13 stakeholder financial institutions, with the strategic and financial backing of the ADB, which provided an initial loan of USD 50 million to support its establishment.

Speaking at the launch, Deputy Minister of Finance and Planning, Dr. Harshana Suriyapperuma, hailed the initiative as a turning point in the country’s economic recovery and entrepreneurial empowerment. “Today marks another milestone in our journey where action speaks louder than words,” he said. “The National Credit Guarantee Institution now provides the facility for deserving businesses to access credit without collateral, wherever possible.”

Dr. Suriyapperuma acknowledged the economic stagnation of recent years, citing reduced lending, high inflation, and stalled development projects. He emphasized that the new government’s challenge is to reignite economic activity and restore confidence among entrepreneurs.

The scheme is designed not only to support traditional industries but also to encourage innovation and expansion into high-potential sectors such as exports, agriculture, eco-tourism, IT services, and environmentally friendly industries.

“This facility, long available in other countries, was a missing piece in Sri Lanka’s business landscape. From today, that gap is filled,” Dr. Suriyapperuma declared, calling for collective effort to ensure the success of the initiative.

Sri Lanka launched  the National Credit Guarantee Institution Limited (NCGIL) on Monday (2) in Colombo.

The initiative is aimed at enabling micro, small, and medium enterprises (MSMEs) to access finance without the need for collateral.

NCGIL was established through a Public-Private Partnership (PPP) between the Government of Sri Lanka and 13 stakeholder financial institutions, with the strategic and financial backing of the ADB, which provided an initial loan of USD 50 million to support its establishment.