Wednesday Jan 28, 2026
Wednesday Jan 28, 2026
Wednesday, 28 January 2026 00:25 - - {{hitsCtrl.values.hits}}
Economic Development Deputy Minister Nishantha Jayaweera
Amid growing criticism that micro, small and medium-sized enterprises (MSMEs) affected by Cyclone Ditwah were not receiving adequate recovery support, Economic Development Deputy Minister Nishantha Jayaweera and Finance Ministry officials recently conducted a seminar for Parliamentarians on the Government’s initiatives to date.
According to the Parliament Secretariat, Finance Ministry officials pointed out that the Government has addressed the biggest challenges faced by MSMEs: access to credit due to a lack of collateral and high interest rates.
As a response to high interest rates, a refinancing loan scheme implemented through Government or development partners’ funds, as well as interest subsidy loans, has been introduced, with Rs. 95.7 billion allocated for interest subsidy loans for 2026.
Since 16 December 2025, three State banks have commenced issuing working capital loans required for the rapid recovery of MSMEs affected by Cyclone Ditwah. In addition, 13 more banks, including private banks, have expressed willingness to enter into agreements to provide these loans.
The Finance Ministry has also allocated Rs. 10 billion to be provided to banks interest-free to lend up to Rs. 25 million to MSMEs at 3% interest.
Furthermore, under the loan facility for the revival of MSMEs, loans of up to Rs. 25 million can be obtained at 5% interest through all State and private banks, with Rs. 25 billion allocated for this purpose in 2026, Finance Ministry officials said.
In addition, discussions were held on the operations of the National Credit Guarantee Institution (NCGI), established to address the difficulty entrepreneurs face in providing collateral when obtaining loans.
At present, collateral coverage of 67% is provided for the relevant loan amount, while 80% coverage is provided for women entrepreneurs.
MPs pointed out that providing collateral coverage for only 67% of the loan amount, leaving 33% uncovered, poses practical difficulties and requires attention. They also noted that MSMEs had not been adequately informed about the scheme.
Finance Ministry officials said Rs. 800 million has been allocated for a Rs. 5 million agriculture loan scheme, which is expected to roll out by the second week of February.
MPs were also briefed on a proposed loan scheme to be implemented through Asian Development Bank funding and other loan schemes offering interest subsidies.
Opposition Leader Sajith Premadasa, several Deputy Ministers, and MPs attended the session.
