Govt. rolls out broad financing push to revive MSME sector

All MSME-focused financial facilities pooled at Rs. 95 b under single, digital and rules-based framework administered by Development Finance Department. NCGI plans to issue Rs. 7 b in credit guarantees in 2026, unlocking around Rs. 10 b in MSME lending, easing chronic collateral constraints

- 

THE Government has placed micro, small and medium-scale enterprises (MSMEs) as a key pillar of its economic recovery and stabilisation strategy, with a sweeping set of financial interventions rolling out to address longstanding funding constraints, post-crisis stress, and disaster related disruptions.

Through the Finance, Planning and Economic Development Ministry, it has intensified efforts to expand concessional lending, strengthen credit guarantees, and introduce relief mechanisms for distressed borrowers, while also responding to natural disasters such as Cyclone Ditwah.

Accordingly, all MSME-focused financial facilities have now been pooled into a single framework amounting to Rs. 95 billion, administered through an online, rules-based system designed to minimise discretion and external influence.

Complementing this, the National Credit Guarantee Institution (NCGI) plans to issue Rs. 7,000 million in credit guarantees in 2026, enabling MSME lending of around Rs.

10,000 million and further addressing the chronic collateral deficit faced by small businesses.

Operationally, access to these concessional loans follows a structured process involving preliminary business assessments and field inspections conducted by relevant officers attached to institutions such as the Small Business Development Division, National Enterprise Development Authority, Industrial Development Board, and Divisional Secretariats.

Recommendation letters issued through this process allow entrepreneurs to apply via participating banks, with approvals routed digitally through the Development Finance Department.

Similar procedures apply for agriculture-focused schemes, with initial recommendations issued by officers of the Agriculture, Livestock, Lands and Irrigation Ministry, while disaster relief loans require certification by Grama Niladhari and Divisional Secretaries.