The International Finance Corporation (IFC) — part of the World Bank Group — has pledged a US$166 million financing package to strengthen Sri Lanka’s private sector and expand access to credit for small and medium-sized enterprises (SMEs). The announcement on January 26, 2026 underscores renewed confidence in the island nation’s economic recovery as it transitions from crisis stabilization to sustainable growth.
The comprehensive financing package will be channelled through three leading private commercial banks in Sri Lanka: Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB). The investment comprises a US$50 million loan, US$80 million in risk-sharing facilities (RSFs), and US$36 million in trade finance guarantees.
According to the IFC, SMEs comprise more than 75 percent of all businesses in Sri Lanka and provide roughly 45 percent of employment, yet many face persistent difficulties in securing loans due to tight credit conditions and limited collateral. The new financing is designed to alleviate these barriers, helping small firms expand operations, modernise, and contribute to job creation nationwide.
The US$50 million loan to NTB marks the IFC’s first debt investment in Sri Lanka’s financial sector since the 2022 economic crisis. Of this, US$7.5 million — or 15 percent — has been earmarked specifically for on-lending to women-owned SMEs, aiming to address gender gaps in access to finance.
Under the RSFs, the IFC will share 50 percent of potential losses on eligible SME loan portfolios with participating banks, including US$60 million for CBC and US$20 million for NDB. This structure is intended to encourage lenders to extend more credit to promising but previously underserved entrepreneurs.
In addition to supporting credit expansion, the US$36 million trade finance guarantee facility — split between NTB and NDB — will enhance the banks’ ability to support import and export activities, particularly for smaller firms integrating into global supply chains.
The IFC also plans to provide technical assistance to modernise digital transaction banking and upgrade climate risk management systems at partner banks, strengthening financial infrastructure and resilience.
IFC officials say this investment sends a “strong signal of confidence” in Sri Lanka’s economic trajectory, with support concentrated where it’s needed most — fostering inclusive growth, supporting underserved communities, and enabling long-term competitiveness.
