Sri Lanka is poised to take a bold leap into the future of finance with the launch of its first-ever FinTech Summit 2025, scheduled for September 24–25 at the Bandaranaike Memorial International Conference Hall (BMICH). With the theme “Empowering Sri Lanka’s Digital Economy: Innovations Driving Financial Inclusion and Growth,” the event marks a strategic pivot from simply solving problems to creating transformative economic opportunities through technology.

The summit arrives at a time when the global FinTech sector is projected to reach $1.5 trillion by 2030, with South Asia emerging as its fastest-growing region. Organisers believe Sri Lanka, due to its strategic location, educated workforce, and evolving digital infrastructure, is well-placed to become a regional FinTech leader. The government’s strong backing of digital transformation and signs of macroeconomic recovery further strengthen the nation’s case to position itself as a future innovation hub.

According to Dr. Kumudu Megasooriya, Founder/CEO of TECXA and organiser of the summit, the event is intended to be more than just a two-day conference. It represents the launchpad for a decade-long transformation aimed at overhauling the financial landscape and accelerating economic growth. Key national targets include establishing over 200 FinTech startups by 2028, achieving 95% financial inclusion, and increasing FinTech’s contribution to 3% of GDP by 2030.

“These aren’t just numbers. They represent a fundamental shift in how Sri Lanka builds economic value and inclusivity,” Dr. Megasooriya stated. “We’re laying the foundation for Sri Lanka to become a model for developing nations to emulate in financial innovation.”

The summit will focus on six transformational areas: Future of Finance,Global and Regional Trends,Blockchain, AI and Cryptocurrency,Financial Innovation and Inclusion,Regulatory Compliance and Investment and Ecosystem Growth

Each area aims to address existing gaps in Sri Lanka’s digital financial ecosystem and accelerate progress toward national goals.

A critical component of this transformation is public-private collaboration. Government agencies such as the Finance Ministry, Central Bank, and the Digital Economy Ministry are providing essential policy, regulatory, and infrastructure support. On the private sector side, TECXA is leading technological innovation, while Hatton National Bank’s involvement underscores the banking industry’s commitment to modernisation. The Sri Lanka FinTech Forum ensures broad ecosystem representation.

This collaborative approach ensures that strategies devised at the summit are not just theoretical but actionable—capable of delivering real-world results.In essence, the Sri Lanka FinTech Summit 2025 seeks not just to showcase innovation, but to ignite a financial revolution, positioning the island nation as a trailblazer in inclusive, tech-driven economic development

In a significant boost to Sri Lanka’s ongoing debt restructuring efforts, the government has signed bilateral amendatory loan agreements with the Saudi Fund for Development (SFD) to restructure a total of SAR 516.95 million (approximately USD 138 million). This agreement, signed in Colombo on Monday, comes at a time when the crisis-hit island nation is grappling with one of its worst economic downturns in decades.

The Finance Ministry noted that the Kingdom of Saudi Arabia has played a vital role in supporting Sri Lanka, even during its most difficult phase when it declared a debt standstill in 2022. Despite the financial uncertainty and global hesitancy, the SFD continued its loan disbursements, enabling the uninterrupted implementation of several development projects across the country.

“This assistance enabled us to make significant progress on vital development projects without hindrance,” the Finance Ministry said in a statement, acknowledging that the loans were extended on concessionary terms, offering much-needed relief to the country’s overall debt burden.

Sri Lanka’s Treasury Secretary Harshana Suriyapperuma signed the agreements on behalf of the government, while Sultan Abdulrahman A. Almarshad, CEO of the Saudi Fund for Development, represented the Kingdom. The agreement is part of Sri Lanka’s broader external debt restructuring program, which is a key component of its economic recovery strategy under the guidance of the International Monetary Fund (IMF).

This latest development marks Saudi Arabia’s deeper involvement in Sri Lanka’s financial recovery. According to official data, the total exposure of the SFD to Sri Lanka before restructuring stood at over SAR 517 million, primarily in the form of concessionary loans for infrastructure and development projects in energy, education, and health sectors.

The restructuring of this debt is expected to strengthen Sri Lanka’s negotiations with other bilateral creditors and commercial lenders. Analysts say such agreements serve as confidence boosters for international markets and institutions, enhancing the credibility of Sri Lanka’s restructuring process and creating fiscal space for critical public investments.

“The conclusion of these loan restructuring agreements will further deepen the longstanding bilateral relations between Saudi Arabia and Sri Lanka,” the ministry added, expressing optimism about future cooperation in trade, investment, and development finance.

As Sri Lanka strives to finalize its debt treatment plans with other official creditors under the Common Framework and secure sustainability in public finance, the support from nations like Saudi Arabia provides much-needed momentum. The agreement reflects not only financial relief but also growing geopolitical goodwill towards the island nation’s path to recovery.

Sri Lanka is accelerating its digital transformation agenda, with plans to onboard over 150 government institutions to the GovPay digital payment platform by September 2025. The initiative, led by the Digital Economy Ministry and the Information and Communication Technology Agency (ICTA), aims to drive a cashless, efficient, and transparent public service.

Since its launch in February 2025, GovPay has facilitated over Rs. 65.62 million in digital payments through more than 7,000 transactions across 52 state institutions. Speaking at a press briefing, Deputy Digital Economy Minister Eng. Eranga Weeraratne highlighted digitalisation as a top priority for the Government, describing digital payments as a key pillar in building a modern, inclusive economy.

“A cashless society is not just about convenience. It’s about empowering citizens, especially MSMEs, by improving access to financial tools like microcredit through formal digital records,” he said.

Chief Presidential Adviser on the Digital Economy and ICTA Chairperson Dr. Hans Wijayasuriya emphasized GovPay’s role within the broader Digital Economy Blueprint, which includes infrastructure like broadband, hybrid cloud computing, and Digital Public Infrastructure (DPI). He confirmed plans to expand broadband access nationwide within the next 3–5 years, while integrating local and international cloud services to support the Government’s digital services.

Dr. Wijayasuriya added that a digital ID system is expected by early 2026, followed by nationwide population registration. These systems will serve as the foundation for public services and innovation, enabling developers to build applications through open APIs and sandbox testing environments.

GovPay is already integrated with major banks and fintech platforms, and discussions are ongoing to add credit and debit card payment capabilities by August. LankaPay CEO Channa de Silva noted that this will extend access to overseas users and increase convenience. He also underscored potential economic gains, with digital payments expected to save around 0.6% of GDP by reducing cash handling costs.

ICTA Board Member Harsha Purasinghe revealed that by 2026, GovPay is targeting Rs. 1 billion in transaction value, and aims for Rs. 1 trillion within four years. The initiative is forecasted to contribute over $3 billion in economic value by 2030.

A key use case rolling out soon is the digital payment of traffic fines. A pilot will begin this month across police stations in the Western and Southern Provinces, with nationwide implementation due by September. Officers will be issued devices for issuing e-charge sheets, linked to the ‘D-mail’ real-time vehicle verification system. This project will also be among the first to adopt the upcoming national digital ID system.

GovPay, officials say, is central to Sri Lanka’s goal of becoming a $15 billion digital economy by 2030.

Sri Lanka’s apparel industry is facing renewed pressure amid falling US retail sales and looming tariff hikes that could derail exports to one of its key markets. The latest data from the US National Retail Federation (NRF) reveals a sharp slowdown in consumer spending on clothing in June 2025, signaling potential trouble for exporters like Sri Lanka.

According to the CNBC/NRF Retail Monitor, US sales at clothing and accessory stores dropped 0.22% month-on-month in June after seasonal adjustments—marking the first monthly decline since February. While unadjusted year-on-year sales grew by 2.71%, this was still a slowdown compared to the 3.21% rise in May, underscoring weakening consumer demand.

The US retail sector, already grappling with economic uncertainty, is bracing for further headwinds from trade tensions. NRF President Matthew Shay pointed out that although consumers still have the ability to spend, the overall economic momentum is slowing. “Spending was down across almost all sectors,” he noted, warning that unresolved trade policies were acting as a major drag despite legislative measures like the “Big Beautiful Bill” aimed at stimulating growth.

For Sri Lanka’s apparel industry—which relies heavily on the US market for its export income—this downturn comes at a critical juncture. The situation is further exacerbated by US President Donald Trump’s renewed tariff threats. Trump has announced new duties of up to 30% on imports from Mexico and the EU beginning August 1, 2025. In addition, over 20 other countries, including key US trading partners like Japan, South Korea, and South Africa, have received notices about potential tariff increases of up to 40%, unless new bilateral agreements are reached.

While Sri Lanka is not yet directly named in the tariff list, trade analysts warn that unless swift diplomatic and trade policy action is taken, the country’s apparel exports could soon be subject to similar treatment. If such tariffs are imposed, the already struggling apparel sector could see export earnings drop significantly, with estimates pointing to a potential 30% or more decline.

Industry stakeholders are urging the Sri Lankan government to immediately engage with US trade officials and explore policy measures to secure tariff exemptions or new trade agreements. With apparel making up over 40% of Sri Lanka’s total export revenue, any prolonged disruption in the US market could have far-reaching economic implications.

As the global retail environment becomes increasingly volatile, Sri Lanka’s export strategy needs urgent recalibration to safeguard one of its most vital sectors from escalating geopolitical risks.

The Sri Lanka Bureau of Foreign Employment (SLBFE) reports that 144,379 Sri Lankan migrant workers left the country for overseas employment between January and June 2025, with male workers outnumbering female workerssignificantly during this period.

According to SLBFE data, 88,684 men and 55,695 women secured foreign employment opportunities in the first half of the year.

The Middle East remains the primary destination for Sri Lankan workers. Kuwait topped the list with 38,806 departures, followed by the United Arab Emirates (UAE) with 28,973, and Qatar with 21,958.

However, there is a noticeable shift in migration trends, with an increasing number of Sri Lankans choosing East Asian countries. Notably, 6,073 individuals departed for Japan, and 3,134 for South Korea within the same period.

In terms of foreign income, Sri Lankan migrant workers remitted a total of US$ 3.73 billion during the first six months of 2025 — a significant 18.9% increase compared to the US$ 3.14 billion recorded during the same period in 2024. For June 2025 alone, remittances totaled US$ 635.7 million.

The SLBFE has expressed optimism that total foreign remittances could reach US$ 7 billion by the end of the year, a target that would provide a much-needed boost to Sri Lanka’s economy.