By: Staff Writer
November 30, Colombo (LNW): Sri Lanka’s private sector credit surged dramatically in 2025, signaling a broad-based recovery and a marked shift in borrowing patterns compared to 2024. Central Bank of Sri Lanka (CBSL) data from April to September reveals that the most significant month-to-month rebounds came from agriculture and personal loans, sectors that had experienced contraction earlier in the year.
While industry and services continue to account for the largest absolute lending volumes, the expansion in credit to previously contracting sectors underscores a diversification of borrowing activity.
Agriculture and fisheries, for instance, recorded net repayments of Rs. 3 billion in May and Rs. 14 billion in June, equivalent to –2.1% and –6.3% of monthly credit. By July, however, the sector reversed sharply, drawing Rs. 31 billion and Rs. 35 billion in July and August, or roughly 17% of total credit each month.
In September, agriculture maintained momentum with Rs. 27 billion, representing 11.7% of monthly lending.
Personal loans mirrored this trend. Net repayments of Rs. 13 billion in April, representing –13.1% of monthly flows, gave way to positive lending from May onwards, with Rs. 37 billion in May, Rs. 60 billion in June, and subsequent growth to 26% of total credit by September.
These flows indicate rising household liquidity and renewed borrowing for small-scale enterprise activities.
Industry lending remained the backbone of private sector borrowing, capturing 29–45% of monthly flows, reflecting steady demand from production-linked sectors. Services, however, displayed volatility, surging to 61.6% in April before dipping below 20% in August and rebounding to 30.7% in September, largely influenced by trade and transport-related credit spikes.
Overall, total private sector credit climbed from Rs. 99 billion in April to Rs. 231 billion by September. According to CBSL’s broader credit report, private borrowings in September alone reached a record Rs. 236.3 billion, pushing total outstanding loans to Rs. 9.52 trillion up 22.1% from a year ago. The surge marks the highest monthly private sector borrowing in history.
CBSL Governor Dr. Nandalal Weerasinghe emphasized that the growth does not indicate overheating but reflects a gradual rebalancing of credit flows across sectors. The data points to an economy regaining momentum, with rural and household borrowing joining the industrial and services sectors in driving expansion.
Analysts caution, however, that monitoring credit distribution remains critical to ensuring sustainable economic growth and preventing sectoral imbalances in the months ahead
