Deputy Minister criticises banks' reluctance to support SMEs

Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe says soft loan scheme and credit guarantee schemes showing poor results

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INDUSTRY and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe recently charged that banks showed little enthusiasm in extending credit to Small and Medium Enterprises (SMEs), despite the availability of State-backed facilities designed to reduce risk.

Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe says soft loan scheme and credit guarantee schemes showing poor results

Notes Rs. 6 b concessional loan pool at 8%, has seen only Rs. 2.5 b requested and Rs. 458 m disbursed as of July 2025

Asserts only Rs. 1 b utilised out of Rs. 15 b credit guarantee scheme

Suggests SMEs must build equity capital

Acknowledges taxes too high, but fundamental macroeconomic problems must be solved

Urges SMEs to shed protectionist mindset and be prepared for opening domestic markets

Speaking at the launch of Ceylon United Business Alliance (CUBA) International, an initiative to connect SMEs to global markets, he said two major schemes introduced by the Ministry remained largely unused.

The first, a Rs. 6 billion concessional loan pool at 8%, has seen only Rs. 2.5 billion requested and Rs. 458 million disbursed as of July 2025. "That's a problem," he said.

The second, the recently introduced credit guarantee scheme worth Rs. 15 billion which allows SMEs to borrow without collateral, has fared no better. "We've launched a credit guarantee system, in which you can borrow with the credit guarantee that you don't have to put collateral and you will never go bankrupt. But only Rs. 1 billion is utilised from that out of Rs. 15 billion," he said.