In a step to strengthen Sri Lanka’s small and medium enterprise (SME) sector, the National Credit Guarantee Institution Limited (NCGI) was officially launched today (6), creating new financing opportunities for entrepreneurs who struggle to access credit due to lack of collateral.
Announcing the launch via social media, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe described the new institution as a turning point in the country’s economic landscape, especially for underserved businesses and women entrepreneurs.
The initiative is a collaborative effort between the Ministry of Finance and the Asian Development Bank (ADB), and functions as a public-private partnership involving 13 private financial institutions. The government holds a 90 percent stake in the institution’s capital, with the remaining 10 percent shared among participating banks and financial institutions. The ADB has provided the initial capital of USD 50 million along with technical support to establish the institution.
“Some people don’t believe in collateral-free loans, but those familiar with the SME sector know that such mechanisms already exist in many forms. Now, Sri Lanka has taken a bold step to formalise and expand access,” Abeysinghe said.
The NCGI addresses a major barrier faced by SMEs: the inability to provide collateral for loans. Under the new system, the institution will offer a 67 percent credit guarantee to banks on approved SME loans, enabling financial institutions to lend to viable businesses without requiring traditional security.
According to the deputy minister, this scheme is particularly significant for women entrepreneurs, who often face structural and legal challenges in proving asset ownership. The credit guarantee model aims to close that gap and foster inclusive economic growth.
Entrepreneurs can access loans ranging from Rs 500,000 to Rs 25 million, depending on the financial strength and viability of their businesses. Abeysinghe emphasised the importance of presenting a credible business plan to access funds under the scheme.
As of now, 116 entrepreneurs have already benefited from the facility, with Rs 500 million in loans disbursed.
Entrepreneurs interested in applying can seek guidance from officials of SEDD, IDB, or NEDA located in every Divisional Secretariat.
Both the Ministry of Finance and the Ministry of Industries have pledged to work closely to expand and strengthen the programme, with the goal of driving long-term economic empowerment through SME development.
“This is not just another loan scheme—it is a milestone in our economic history,” Abeysinghe said, calling for increased public awareness and collective support for the initiative.
