July 09, Colombo (LNW): The government expects to extend collateral-free financing to another 1,000 entrepreneurs before the end of the year through the National Credit Guarantee Institution (NCGI), increasing the total number of beneficiaries under the programme to 3,000, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe announced.
The latest phase of the initiative follows the issuance of the NCGI’s 2,000th credit guarantee, awarded through Commercial Bank to an entrepreneur engaged in the kithul products industry. The occasion also coincided with the opening of the institution’s new operations centre at HNB Tower in Colombo.
Addressing the event, Abeysinghe said the scheme was introduced to support entrepreneurs with viable businesses who are unable to obtain bank financing because they lack assets to offer as collateral.
He noted that conventional lending practices often prevent small and medium-sized enterprises from securing capital despite having promising business models. Under the NCGI scheme, the government provides a credit guarantee, allowing financial institutions to approve eligible loans without requiring borrowers to pledge property or other assets as security.
According to the Deputy Minister, businesses seeking assistance under the programme must demonstrate sound financial management, stable cash flow, realistic business projections and satisfy the lending criteria of participating banks before qualifying for the government-backed guarantee.
Since its launch around 15 months ago, the NCGI has facilitated more than Rs. 14 billion in loans by issuing 2,000 guarantees, providing a significant boost to entrepreneurs across a range of industries.
The government expects the programme to play a greater role in expanding access to finance for small businesses while complementing wider efforts to strengthen the country’s financial sector through initiatives involving microfinance, cooperative banking, a proposed development bank and an ownership capital fund.