By: Staff Writer

December 09, Colombo (LNW): Sri Lanka’s decision to roll out a Rs. 80 billion loan scheme for new entrepreneurs in January comes at a time when micro, small, and medium enterprises (MSMEs) the bedrock of the national economy are suffering unprecedented losses after the recent cyclone disaster.

According to preliminary assessments by the Disaster Management Centre and provincial authorities, over 92,000 MSMEs have been directly affected nationwide, with nearly 28,000 reporting complete or near-total damage to machinery, production lines, or inventory. An estimated 350,000 workers face reduced income or temporary unemployment as a result of disrupted operations. These figures highlight the scale of economic pain at the grassroots level and fuel debate on whether the government’s new lending scheme addresses the country’s most urgent needs.

Industry and Entrepreneurship Development Minister Sunil Handunneththi told the Ministerial Consultative Committee that the Rs. 80 billion allocation in the 2026 Budget will be channelled through a joint programme involving the Finance Ministry and the banking sector.

The intention, he said, is to deliver “more effective and targeted lending” for new entrepreneurs. MPs will receive a full sector-eligibility briefing and access-mechanism guide in January.

However, MSME chambers argue that existing enterprises require immediate bridge financing, not long-term entrepreneurial stimulation. With tens of thousands of firms unable to restart operations and supply chains collapsing, business groups warn that without urgent recovery assistance, Sri Lanka risks permanent MSME attrition, undermining the economy’s productive capacity for years.

To strengthen policy coordination, the Ministry will also introduce a National Database for Industrialists, integrating all industrial and enterprise information into a unified platform. Officials say this will streamline service access and improve transparency in future support schemes. A nationwide promotional campaign will encourage entrepreneurs and MSMEs to register.

The Committee further explored a proposal to expand collateral-free lending to craftsmen registered with the National Crafts Council. Members highlighted its potential to revive micro-craft industries, especially in rural areas where cyclone damage has severely disrupted household economies. Yet, critics note that without widespread disaster-relief credit, such initiatives may be insufficient to counter the massive financial shock faced by MSMEs.

In a more positive development, National Paper Company Ltd. reported a production jump from 150–180 tons to 400 tons per month after recent operational reforms evidence, officials say, that targeted state support can deliver rapid results.

The meeting also reviewed a newly designed National Advisory Framework for excavation permits, aimed at replacing fragmented approval systems with a unified structure from January.

As Sri Lanka moves ahead with the Rs. 80 billion entrepreneur-loan programme, a pressing question hangs over the economy: Can the country afford to prioritise new enterprise creation while thousands of MSMEs the true backbone of economic activity, are fighting for survival? The government’s ability to balance long-term growth with urgent recovery will determine whether this initiative becomes a catalyst for economic revival or a strategic misstep.

By: Staff Writer

December 09, Colombo (LNW): The economic turmoil that struck Sri Lanka after Cyclone Ditwah calls for swift, focused relief, something the IMF’s Rapid Financing Instrument (RFI) is designed precisely for. Under recent announcements,

Sri Lanka has requested roughly US$ 200 million under the RFI: SDR 150.5 million (about 26 % of its IMF quota), with the intention of mobilizing immediate support for reconstruction, humanitarian aid, and balance-of-payments stabilization.

The RFI stands in sharp contrast to the island’s ongoing Extended Fund Facility (EFF) arrangement a long-term, structural reform programme approved in March 2023 that aims to restore macroeconomic stability, rebuild reserves, manage public debt, stabilize inflation, and implement fiscal and governance reforms.

Under the EFF, Sri Lanka has already drawn multiple tranches by early 2025, it had received over SDR 1.0 billion; by mid‑2025, support reached SDR 1.27 billion (about US$1.74 billion) after the fourth review.

The EFF’s objective is structural: it is meant for countries facing serious, medium-term balance-of-payments issues caused by deep-rooted fiscal, monetary, and institutional weaknesses.

Because these structural problems require time often several years the EFF features long repayment periods, periodic reviews, and strict conditionalities (such as fiscal consolidation, governance reforms, debt restructuring, energy pricing, social safety nets).

By contrast, the RFI is a rapid, low-access instrument intended for urgent, often short-lived crises such as natural disasters, sharp external shocks, or sudden liquidity shortfalls.

It offers single‑disbursement loans, with no program‑based conditionality or periodic reviews, and repayment typically within 3¼ to 5 years.

This makes it well-suited for a country like Sri Lanka now hit by a cyclone whose consequences are immediate and severe, but (hopefully) not structural in nature.

Given the circumstances, most analysts argue that tapping the RFI alone preserves the credibility and momentum of the existing EFF programme. Using the RFI does not interfere with structural reform commitments, debt‑sustainability efforts or external buffer rebuilding. In fact, IMF sources confirm that the RFI request is being processed separately, and that the next scheduled EFF review will resume only after the RFI decision.

In practical terms, this ensures that Sri Lanka receives immediate liquidity for reconstruction and relief while maintaining its longer-term reform trajectory. For an economy still emerging from years of crisis with progress on inflation, revenue‑collection, debt restructuring and more under the EFF the RFI represents a surgical, well‑timed intervention.

In conclusion: at this moment, what Sri Lanka needs is emergency support, not another bailout programme. The RFI is the right tool; issuing calls for a new multi‑year IMF programme would be counterproductive. If implemented and communicated clearly, this dual approach RFI for disaster relief + EFF for structural reform might just preserve both short-term stability and long-term recovery.

December 09, Colombo (LNW): Dreamron has unveiled a new social initiative, “Dreamron Athwela,” aimed at assisting beauty salons across Sri Lanka that suffered losses due to the recent widespread floods.

The programme seeks to help salon owners who have been unable to reopen and have faced significant income disruption.

In the first phase of the initiative, emergency financial aid of Rs. 25,000 was distributed to 28 salons located in Kaduwela, Ambatale, and Biyagama, which were heavily affected by the floods on December 07. This support is intended to provide immediate relief to keep businesses afloat during the recovery period.

The programme will continue on Friday (12), when 30 additional beauty salons in Gampaha and Giriulla are set to receive the same financial assistance. Dreamron has also announced plans to extend the scheme to other regions in the coming weeks.

Beyond cash support, Dreamron will supply each affected salon with a specially curated Dreamron beauty kit to help owners restart their operations and serve clients once again.

Dr Priyanka Perera, Chairman of Dreamron Group of Companies, and Nisha Perera, Managing Director of Dreamron Beauty College, are spearheading the project, reflecting the company’s commitment to the local beauty sector and the wider Sri Lankan community.

Dreamron, which is widely recognised for its high-quality beauty products both domestically and internationally, emphasises that the “Dreamron Athwela” initiative is part of its broader mission to support beauty professionals and contribute positively to the nation’s recovery efforts.