Govt. champions collateral-free credit for MSMEs at NCGIL launch

• Deputy Finance Minister Dr. Harshana Suriyapperuma pledges continued support to empower MSMEs, calling it delivery of key economic promise
• Describes launch of NCGIL as major reform to boost MSME lending via partial guarantees up to 67%
• States first credit guarantee already issued in Welimada, signalling countrywide reach beyond Western Province
• Calls on banks to assess cash flow over collateral, support startups, green ventures and tech-driven MSMEs
• Emphasises NCGIL’s role in rebuilding business confidence and driving inclusive, employment-generating economic growth
• Urges stakeholders to raise awareness at grassroots level to ensure NCGIL benefits reach underserved communities

Finance and Planning Deputy Minister Dr. Harshana Suriyapperuma  - Pic by Ruwan Walpola

Deputy Finance Minister Dr. Harshana Suriyapperuma yesterday pledged the Government’s continued support to empower micro, small and medium enterprises (MSMEs) through accessible, collateral-free credit.

Delivering the keynote address at the official launch of the National Credit Guarantee Institution Ltd., (NCGIL) yesterday, he acknowledged the initiative as a mammoth step in the country’s financial sector development, which provides a vital safety net for entrepreneurs by enabling access to credit without the traditional burden of property-based collateral.



He framed the official launch not simply as a financial reform, but as a fulfilment of a core promise in the Government’s economic manifesto to provide credit access without collateral to deserving entrepreneurs and businesses.

“This is a moment of delivery. This is not just about words—this is about action,” he added.

The NCGIL was established through a public-private partnership (PPP) between the Government and 13 stakeholder financial institutions, with the strategic and financial backing of the Asian Development Bank (ADB). The core objective of the NCGIL is to improve access to credit for MSMEs by offering partial credit guarantees of up to 67%, thereby mitigating the credit risk for financial institutions and facilitating increased lending to the sector. 

It marks the first time such a model—jointly implemented by the Government of Sri Lanka and its financial partners—has been introduced on a national scale to empower the country’s MSMEs.

Dr. Suriyapperuma acknowledged the severe disruptions to lending, investment, and project implementation across sectors. 

“We are restarting from where we stopped. Lending had stalled, borrowing was down, inflation was high, and entrepreneurs had lost confidence. Our Government was elected with a mission to restore that confidence,” he said.

He described the NCGIL’s mandate to provide partial credit guarantees as a critical instrument to jumpstart business activity, rebuild trust in financial systems, and reignite entrepreneurship.

“The challenge ahead of the new Government was to ensure we restart that process, provide the support, and provide the facilitation to ensure businesses will have the confidence to come back and to start engaging. Entrepreneurs will have the confidence to try again. Small and medium enterprises (SMEs) will have the tenacity to go back to the finance sector and start borrowing,” he added.

The Deputy Minister also noted that the success of the NCGIL is a result of collaborative efforts between the Government, ADB, Central Bank, private and State banks, and various national stakeholders.

Dr. Suriyapperuma expressed optimism about the fact that the first partial credit guarantee issued by the NCGIL had already supported an SME in Welimada, a rural area, even before the ceremonial launch. 

“This is proof that the institution’s impact is reaching underserved regions outside the capital. This is not about the Western Province alone. This is about taking development to every part of Sri Lanka,” he stressed, calling on banks to raise awareness of the new facility among branch-level staff and local entrepreneurs.

Highlighting the evolving role of SMEs in Sri Lanka’s economic future, Dr. Suriyapperuma emphasised the need to move beyond traditional industries, with targeted support for startups, university entrepreneurs, green businesses, tech ventures, and exporters. 

“This is an opportunity for dreamers, for those who never had access to finance before. This is a way to break the cycle of poverty, create jobs, and build a more inclusive economy,” he said. 

Dr. Suriyapperuma called on banks to assess business cash flow and viability, not just collateral, and to adopt financing models that empower innovation and reduce risk premiums for aspiring entrepreneurs. 

The Deputy Minister also extended gratitude to the ADB for its financial and technical support, including a $ 50 million equity loan and capacity-building assistance provided to operationalise the NCGIL. 

In addition, he commended the Presidential Secretariat, the Treasury, and the Industry and Entrepreneurship Development Ministry for their cooperation and encouragement, noting that the success of the NCGIL will ultimately be measured by its impact on real businesses and families across the country.

The NCGIL will work closely with commercial banks, development banks, and non-bank financial institutions to roll out credit guarantees for a range of industries, including manufacturing, services, agribusiness, and technology-based ventures. By shifting the risk-sharing model and increasing credit flow, the agency aims to unlock the economic potential of thousands of small-scale entrepreneurs.