Corporate Bond market too shallow to carry 7% growth: IIX

Friday, 30 October 2026 00:22 - - {{hitsCtrl.values.hits}}

IIX Senior Director Priyank Tiwari

– Pic by Shehan Gunasekara

Corporate Bond market at about 1% of GDP despite GSS+ momentum
Public investment steady at about 3% of GDP; private capital must drive growth
Banking sector recovery solid but insufficient to finance growth alone

Sri Lanka’s corporate Bond market, at about 1% of GDP, is too shallow to finance the private sector-led growth the country needs to sustain about 7% annual expansion to 2030, according to new research by the Impact Investment Exchange (IIX).

Presenting the report, ‘Financing Sri Lanka’s Inclusive Growth’, at the Orange Economy Summit 2026 in Colombo on Wednesday, IIX Senior Director Priyank Tiwari said the 7% target was almost double the current growth rate, alongside an ambition to double exports.

“Public investment has been at a very steady 3% of GDP, so growth has to come from the private sector, especially when we are talking about high growth targets,” Tiwari said.

Sri Lanka has a strong and stable banking base, he said, and the sector has been undergoing a solid recovery that should allow it to unlock more capital.

“But the banking sector alone is not enough to fuel this growth,” he said. The CSE’s GSS+ framework has already drawn 12 Bonds, yet the corporate Bond market remains about 1% of GDP. The report argues for systematically deepening Sri Lanka’s financial markets so more companies and institutions can raise capital through different avenues.

The report identifies anchor value chains that are integral to growth, each with its own capital needs. It argues that inclusion runs through these value chains, through the jobs, communities and women they sustain. Strengthening them down to the last mile was essential to meeting the growth and export targets, Tiwari said.

“The starting point for us is not zero,” Tiwari said, citing the Central Bank’s sustainable finance roadmap and taxonomy, the CSE’s GSS+ framework and existing initiatives to improve financing for women entrepreneurs. The task now, he said, was to link these initiatives so the market developed in an integrated manner and in line with global standards.

The report draws on markets where IIX’s model is already operating. In Indonesia, a State-owned anchor issuer, regulatory incentives and a supportive policy environment have moved the market to scale and adoption. Bangladesh saw its first issuance earlier this year and has integrated Orange standards into its GSS guidelines.