Sri Lanka marked a major milestone on June 6 with the official launch of the National Credit Guarantee Institution (NCGI), aimed at expanding access to collateral-free loans for small and medium enterprises (SMEs).
The NCGI is a joint initiative between the Ministry of Finance and the Asian Development Bank (ADB), established as a public-private partnership involving 13 financial institutions. The government holds a 90% stake, with the remaining 10% owned by private banks and finance companies. ADB has provided both the required technical support and an initial capital of USD 50 million.
The institution will offer a 67% guarantee to banks issuing loans to SMEs that lack traditional collateral, allowing businesses to access financing more easily. Loans ranging from Rs. 500,000 to Rs. 25 million are available under the scheme.
Special emphasis has been placed on empowering female entrepreneurs, who often face challenges in accessing credit due to a lack of asset ownership.
As of now, loans have been granted to 116 businesses, totaling Rs. 500 million.
“This is a historic turning point for Sri Lanka’s SME sector,” Deputy Minister Chathuranga Abeysinghe said, adding that the government will continue working closely with the Ministry of Industries to expand access and awareness.
The program is being implemented through regional officers of SEDD, IDB, and NEDA. (Newswire)