The Ministry of Industries held another round of discussions yesterday (28) on addressing the debt crisis faced by small and medium-sized enterprises (SMEs). The meeting, chaired by Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe, focused on ongoing efforts to restructure SME debt and support struggling businesses.
The Deputy Minister stated that discussions with banks, the Ministry of Finance, and the Central Bank are progressing successfully in parallel with these efforts. He highlighted that, according to Central Bank reports, approximately 12,000 SME borrowers are currently in financial distress, with the total affected debt stock amounting to Rs. 210 billion.
However, around 1,000 of these borrowers have already initiated debt restructuring discussions with their banks, while the Ministry has intervened on behalf of approximately 400 borrowers. The restructuring process varies based on each business’s financial situation, covering aspects such as interest write-offs, extended repayment periods, and access to new working capital.
The Deputy Minister emphasised that while banks have actively engaged in the restructuring process, greater involvement from entrepreneurs is necessary. He reiterated that the Ministry serves as a mediator between SMEs and banks, and that entrepreneurs can negotiate directly with their banks or seek assistance from the Ministry to formulate suitable repayment plans.
Recent discussions with leading financial institutions, including Bank of Ceylon, Sampath Bank, and Commercial Bank, have resulted in successful resolutions in nearly half of the cases. The Deputy Minister assured that even if banks initiate legal action under existing laws, affected entrepreneurs still have the opportunity to enter restructuring negotiations.
He urged SME borrowers to engage in discussions with their respective banks to develop sustainable repayment plans. The Ministry of Finance, the Central Bank, and the Ministry of Industry remain committed to supporting all 12,000 affected entrepreneurs in finding viable solutions.
