The overall effort aligns with IFC’s long-standing engagement in Sri Lanka, including past support for financial infrastructure like the Secured Transactions Registry to improve SME credit access.

The International Finance Corporation (IFC), a member of the World Bank Group, has committed US$166 million in loans, risk-sharing facilities, and trade finance guarantees to three leading Sri Lankan banks. This package aims to boost lending to small and medium-sized enterprises (SMEs), with particular emphasis on women-owned businesses and the agri-business sector, while enhancing trade finance capabilities to support economic recovery and inclusive growth.

The IFC’s US$166 million financing package is for Sri Lanka’s private sector. The initiative targets three major banks: Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB). This marks IFC’s first debt investment in the country’s financial sector since the 2022 economic crisis.

“As Sri Lanka rebuilds following multiple shocks, IFC’s collaboration with leading financial institutions is instrumental in addressing urgent needs while laying the foundation for long-term competitiveness,” said World Bank Group Country Manager for Sri Lanka and the Maldives Gevorg Sargsyan, adding that the investments send a strong signal of confidence to the market.

The funds are designed to address persistent credit constraints faced by SMEs, which form the backbone of Sri Lanka’s economy – accounting for over 75 per cent of businesses and nearly 45 per cent of employment. By channelling capital to underserved segments, including women-led enterprises and agri-based firms, the package seeks to drive job creation, resilience, and integration into global supply chains.

Breakdown of the US$166 Million Commitment

The financing is structured across three main components:

• A US$50 million loan to NTB, with US$7.5 million specifically earmarked for on-lending to women-owned SMEs.
• US$80 million in Risk-Sharing Facilities (RSFs), where IFC shares 50% of potential losses on eligible SME loan portfolios: US$60 million allocated to CBC and US$20 million to NDB. These facilities are supported by the International Development Association’s Private Sector Window through the Small Loan Guarantee Programme.
• US$36 million in trade finance guarantees under IFC’s Global Trade Finance Program: up to US$20 million for NTB and US$16 million for NDB.

These tools are intended to build confidence among banks to extend more credit to SMEs and expand trade-related services.

Focus on Inclusive Growth and Long-Term Resilience

IFC officials highlighted the strategic importance of the investment amid Sri Lanka’s ongoing recovery from multiple shocks.

Allen Forlemu, IFC Regional Industry Director for Financial Institutions in Asia and the Pacific, stated: “SMEs are the undisputed backbone of Sri Lanka’s economy, and their growth is essential for creating jobs. By helping banks channel capital to women-led businesses, smallholder farmers, and the sectors driving recovery, we are enabling Sri Lanka not just to rebound, but also to grow forward with greater resilience and inclusivity.”

Imad Fakhoury, IFC Regional Division Director for South Asia, added: “In partnership with NTB, CBC and NDB, our investments aim to build a foundation that empowers SMEs and communities to plan ahead, withstand future shocks, and participate fully in the opportunities that a competitive, inclusive economy can deliver.”

In addition to financing, IFC will provide advisory support to NDB for modernizing digital banking, supply-chain finance, and climate risk management. The overall effort aligns with IFC’s long-standing engagement in Sri Lanka, including past support for financial infrastructure like the Secured Transactions Registry to improve SME credit access.