Thursday Jan 15, 2026
Thursday Jan 15, 2026
Thursday, 15 January 2026 00:30 - - {{hitsCtrl.values.hits}}
The Government has rolled out a series of policy and financing reforms aimed at easing longstanding credit bottlenecks faced by entrepreneurs, as part of a broader push to strengthen industrial development and shift the country towards a production-based economy.
In a statement outlining key policy priorities, Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe yesterday announced that limited access to capital, particularly debt financing, has been one of the most critical challenges hindering entrepreneurship.
He identified high interest rates, the absence of grace periods, short loan tenures, lack of collateral, low public awareness of concessionary schemes, and unclear eligibility criteria as persistent barriers for businesses.
“These challenges have constrained the growth of industrial ventures for years,” the Deputy Minister said, adding that the present Government has introduced “credible and constructive solutions” to address each of these issues.
He said the Rs. 95 billion concessionary loan facility for 2026 was made available following continuous discussions between the Industries Ministry and the Finance Ministry throughout last year.
The loans will be offered at an interest rate of around 5%, marking the first time such a large allocation has been made available for industrial development at exceptionally low borrowing costs.
Abeysinghe stressed that entrepreneurs must actively engage with the banking system, prepare viable business proposals, and strengthen their enterprises to qualify for financing. While line Ministries may approve projects, he noted that final decisions on loan viability and collateral requirements rest with commercial banks.
Addressing the longstanding collateral constraint, the Deputy Minister said the issue was partially resolved in 2025, with 1,248 entrepreneurs already receiving collateral-free loans. He added that efforts are underway to further ease challenges faced by start-up businesses within the year.
To prevent misuse of concessionary credit, a structured digital mechanism has been introduced through the Finance Ministry. This includes separate allocations for small-scale loans and restrictions on repeated borrowing by the same individuals.
Abeysinghe called on entrepreneurs to use the facility responsibly by maintaining proper accounts, complying with tax obligations, and formalising their operations. “The responsibility now lies with businesses to create sustainable and resilient enterprises,” he said, underscoring the Government’s broader goal of transitioning towards a production-based economy.
