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Who really wins from Sri Lanka's vehicle loan boom?
Daily FT
|November 13, 2025
THE Central Bank’ latest report reveals that Rs. 1.16 trillion in vehicle-backed loans were issued in just the first six months of 2025—an astonishing 63% of total lending by Licensed Finance Companies. On the surface this looks lke a sign of recovery, Pent-up demand has finally been released after years of import restrictions. Government revenue has improved, and auto sector activity has revived.
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But beneath this celebratory headline lies a troubling question:
Are we once again fueling consumption with debt, instead of funding growth?
Inthe past, Sri Lanka's foreign exchange crisis was triggered partly by excessive reliance on imported, nonproductive consumption goods —vehicles being the most notable example. Now, scarce credit and foreign reserves are again being funnelled into the same pattern. From a national economic standpoint, the risks ae clear:
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