Small and medium-scale businesses in Sri Lanka can access loans without pledging land or fixed assets through the National Credit Guarantee Institution (NCGI), Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe said on Tuesday.
Under the scheme, loans are granted on the basis of business viability rather than collateral. The government guarantees 70% of the loan and the bank or finance company covers the remaining 30%. For women entrepreneurs, the government’s share rises to 80%, the Deputy Minister told reporters according to Newswire.
A total of 1,747 businesses have benefited from the programme to date, Abeysinghe said. Applications are made directly through banks, with no ministerial letters or political approvals required. Eligibility hinges on a business’s cash flow strength: banks recommend the loan and the NCGI grants final approval.
The Deputy Minister’s framing of the NCGI as a low-friction, no-collateral channel comes against persistent complaints that SMEs are still being shut out of formal credit despite headline programmes. The Industry Ministry reported Rs. 31 billion in SME loans were disbursed in the first quarter, but the Sub-Committee on Economy was told earlier this year that commercial banks have been “blocking” SME access to a Rs. 95 billion concessional credit line.
NCGI guarantees sit alongside other targeted SME finance lines, including the Australia–CBSL MSME financial-literacy programme under the S4IE umbrella and a recent USD 15 million MSME facility raised by LB Finance with Enabling Qapital.
Source: Newswire — Collateral‑Free Loan System: Deputy Minister of Industry explains.
