By: Staff Writer
June 19, Colombo (LNW): The Sri Lankan government is intensifying efforts to revive and support Small and Medium Enterprises (SMEs) with a sweeping financial package exceeding Rs. 1 trillion and a raft of institutional reforms aimed at boosting long-term sustainability, the Ministry of Finance announced.
In 2024 alone, over Rs. 1 trillion has been distributed to SMEs through 16 public and private banks, resulting in the issuance of 163,279 loans. Finance Ministry data show that approximately 51% of this funding has been directed towards industrial enterprises, with 13% allocated to agriculture and service sectors.
Recognising the critical role SMEs play in the economy—contributing 52% to GDP and employing over 4.5 million people—the government has rolled out multiple financial and technical initiatives. Among them is the establishment of a Rs. 5 billion fund to support SMEs facing short-term investment and working capital challenges.
The Central Bank has advised licensed commercial and specialised banks to offer extended concessions, including interest relief and new lending lines, to SMEs affected by recent economic crises. Notably, the deadline for banks to finalize rescheduling agreements under Circular No. 04 of 2024 has been extended from June 15 to June 30, 2025, giving businesses additional time to stabilize.
To further strengthen SME resilience, the government is creating a new Development Bank aimed at providing accessible, possibly collateral-free financing, especially for startups and underserved entrepreneurs. At the same time, the Ministry of Industry is enhancing access to low-cost credit through the Industrial Development Board (IDB).
On the technical front, a series of Business Development Services (BDS) will be introduced, including district-level Technical Service Centres to guide SMEs in technology, innovation, and management. A Technology Development Fund is being set up to encourage research and development, complemented by new Voucher Schemes that will subsidize SME access to BDS and R&D.
The Ministry of Industry and Entrepreneurship Development has already formed an Advisory Committee to support businesses still reeling from the COVID-19 pandemic and the economic crisis. Plans are also underway to establish a dedicated SME Authority to consolidate oversight and fast-track development processes.
Sri Lanka had over 1.3 million Micro, Small, and Medium Enterprises (MSMEs) in 2022. However, nearly 16% had closed permanently, and around 4.5% were temporarily shut due to economic hardship. The government’s renewed focus includes tapping into emerging sectors like green technology, ICT, and Agri-tech to ensure SMEs not only recover but thrive in a more resilient economic ecosystem
Govt Launches Revival Drive for Crisis-Hit SMEs providing Rs. 1 Trillion Aid
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