Deputy Minister of Industries and Entrepreneurship Development Chaturanga Abeysinghe has accused commercial banks of blocking small and medium enterprises from accessing a Rs. 95 billion government-backed credit line meant to support the sector during the ongoing economic pressures.
Abeysinghe alleged that some bank branches are discouraging applicants to protect their profit margins. “Some bank branches prioritise increasing their own branch profits,” he said, adding that branches “try to push customers toward their own high-interest internal schemes instead of the government-subsidised options.”
Banks Cited
Three major private banks — Commercial Bank, Hatton National Bank (HNB), and NDB Bank — have reportedly exhausted their initial lending quotas due to high demand, according to EconomyNext. Common excuses cited by the deputy minister include claims that quotas are exhausted or that approval takes months.
Additional funds are expected to be allocated to these banks in the next quarter, and the Finance Ministry typically responds to bank recommendations within two weeks.
Recourse for Businesses
Abeysinghe advised SME owners facing rejections to “immediately meet the Industrial and Entrepreneurship Officers in your area” for assistance navigating the process.
The credit facility is particularly critical as small businesses face a dual squeeze from the Middle East-driven fuel crisis and the incoming 44 percent US tariff that threatens export-oriented manufacturers.
