Thursday Oct 08, 2026
Thursday Oct 08, 2026
Thursday, 8 October 2026 05:32 - - {{hitsCtrl.values.hits}}
Sri Lanka’s banks are leaving a large pool of consumer demand untapped, with a new study finding credit concentrated among higher-income urban households and penetration low enough to leave substantial room for credit-led consumption growth.
According to ‘The Changing Path to Purchase in Sri Lanka,’ released by Boston Consulting Group (BCG) with The Ceylon Chamber of Commerce, 19% of consumers hold credit cards, 18% gold loans, 13% personal loans, 10% auto loans and 9% home loans. Among households earning above Rs. 150,000 a month, credit card holding rises to 33%, and gold loans to 27%. Deposit products such as debit cards and fixed deposits are less skewed towards higher-income households, indicating the divide is widest in lending.
The divide is also geographic. Affluent households are concentrated in the Urban West, while rural Sri Lanka accounts for 56% of the country’s middle-class households, leaving the rural heartland that anchors national consumption the least reached by credit.
BCG Managing Director and Partner Anshuman Upadhyaya said access to banking services was far less prevalent outside urban areas. “If you want to democratise access to lending for small and medium enterprises (SMEs) and for customers who are not in Colombo, who are in the suburbs or in a village, the way to do that is by getting them onto a digital platform,” he said.
The unmet demand shows in spending plans. Vehicles, large appliances, and furniture are the purchases consumers are most likely to defer, yet flexible payment options rank as the fourth most important factor for large-appliance buyers, cited by 45%. Some respondents preferred putting large purchases on a credit card to keep savings aside for emergencies.
Upadhyaya said the gap between overall and upper-income credit holding showed considerable scope for growth. “There is massive headroom to really drive credit, democratise it, and unlock this demand,” he said, adding that the banking infrastructure needed could be built over the next one to two years.
The constraint is reach. Only 25% of account holders bank digitally, from 8% of the lowest-income households to 47% of the affluent. Upadhyaya attributed low adoption largely to unfamiliarity, adding that banks with networks of around 250 branches were limited in how many borrowers their staff could serve. Digital users are highly engaged, using mobile banking 2.8 times a month on average against 0.9 branch visits, but still prefer branches for opening accounts and buying investment products.
Upadhyaya said digital access and access to credit were fundamentally different, but that widening credit required moving beyond the limits of a branch network.
BCG Managing Director and Senior Partner Nishant Gupta said digital access had to come first, with customers progressing from balance checks and small transactions to loans, and the resulting data allowing artificial intelligence (AI) tools to help close gaps in credit assessment. “We are still at 25% digital banking. I think that has to go to a much higher number,” he said.
