By the end of this year, another 1,000 entrepreneurs will be able to access collateral‑free loans under the National Credit Guarantee Institution (NCGI), bringing the total beneficiaries to 3,000, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe said.

The milestone follows the issuance of the 2,000th guarantee through Commercial Bank to a kithul products entrepreneur, marking a symbolic step in widening financial access. 

The expansion was celebrated with the opening of NCGI’s new operations center at HNB Tower in Colombo.

Deputy Minister Abeysinghe said the program was designed to revive stalled dreams of capable entrepreneurs who lacked collateral.

“Normally, when you go to a bank for a loan, the first question is ‘what collateral do you have?’ Because of a lack of collateral, many capable entrepreneurs’ dreams were stalled. It is to give life to those dreams that we introduced this credit guarantee system. Now, instead of collateral, the government intervenes to provide you with a guarantee,” he explained.

To qualify for the facility, businesses must demonstrate organized operations, strong financial cash flow, practical forecasts, and secure agreement from their bank.

Since its launch 15 months ago, NCGI has enabled more than Rs. 14 billion in credit facilities through 2,000 guarantees. 

The institution aims to further strengthen the financial sector by promoting microfinance, cooperative banking, a development bank, and an ownership capital fund. (Newswire)

The post Govt to expand collateral-free loans to 3,000 entrepreneurs by year-end appeared first on Newswire.

The National Credit Guarantee Institution (NCGI) has expanded its operations with the opening of a new office on the 7th floor of HNB Towers in Colombo, inaugurated by Deputy Minister of Industry and Enterprise Development Chathuranga Abeysinghe.

A highlight of the ceremony was the symbolic presentation of the 2,000th guarantee letter issued within just 15 months, enabling more than Rs. 14 billion in loan facilities for small and medium enterprises (SMEs).

The program, supported by the Asian Development Bank (ADB) and the Ministry of Finance, aims to strengthen entrepreneurship by widening financial access for businesses without collateral. 

The NCGI expects to double its reach to 4,000 beneficiaries by year‑end, further boosting its contribution to the domestic economy.

Since beginning operations in January 2025 with its first loan guarantee for an agricultural project in Uva Province, NCGI has directed 20% of loans to women‑owned businesses and 24% to priority sectors including agriculture, IT, tourism, and exports. The largest share of beneficiaries has been in the Western, Southern, and Northern Provinces.

Addressing the new office opening, Deputy Minister Abeysinghe said the government plans to establish a Development Bank and strengthen cooperative banking to support the financial sector. 

He praised the collateral‑free loan scheme as a breakthrough for entrepreneurship, noting: “Going forward, we can increase the loan amount, expand the number of beneficiaries, and strengthen services further.”

He added that, in collaboration with UNDP and ADB, efforts are underway to address challenges in microfinance and equity financing. 

Recalling that private banks extended Rs. 2.1 trillion in loans to the private sector last year, the Deputy Minister urged financial institutions to introduce new mechanisms to support entrepreneurs.

Despite challenges, he noted Sri Lanka’s export sector continues to show growth, and emphasized the government’s full support for poverty eradication through entrepreneurship promotion. (Newswire)

The post National Credit Guarantee Institution issues 2,000 collateral‑free loans in 15 months appeared first on Newswire.

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)

The post National Credit Guarantee Institution launched to support collateral-free loans appeared first on Newswire.