Thursday Dec 25, 2025
Thursday Dec 25, 2025
Thursday, 25 December 2025 00:28 - - {{hitsCtrl.values.hits}}
The Cabinet of Ministers at their meeting on Monday approved the launch of a new concessional agricultural loan scheme titled the “Sustainable Agriculture Program” from next year, aimed at improving rural livelihoods and strengthening agriculture’s contribution to national economic growth.
It was approved to operate the loan scheme as an annual program beginning next year, using Participatory Finance Institutions as the delivery mechanism.
The initiative will be financed through a revolving fund created under the ongoing Smallholder Agribusiness Partnerships Program, which is being implemented with funding support from the Government and the International Fund for Agricultural Development.
The program is being carried out by the Agriculture, Livestock, Lands and Irrigation Ministry in collaboration with the Regional Development Department of the Central Bank of Sri Lanka.
“Under the arrangement, all recoveries from loans issued through the Smallholder Agribusiness Partnerships Program will be channelled into a dedicated revolving fund named the “Sustainable Agricultural Fund”. This fund will be used exclusively to provide agricultural credit, ensuring the long-term continuity of concessional financing for the sector,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said.
Speaking at the weekly post-Cabinet meeting media briefing, he said the Government expects to allocate Rs. 800 million from the Sustainable Agricultural Fund for the implementation of the Sustainable Agriculture Program in 2026.
“The loan facility will be offered under two categories – individual loans and bulk loans. Individual borrowers and institutions will be eligible for loans of up to Rs. 5 million through agricultural banks and Samurdhi banks, with a maximum repayment period of five years. These loans will carry a highly concessional effective interest rate of 2% per annum, with grace periods of up to 12 months for applications and joint ventures, and six months for working capital facilities. Bulk loans will be capped at Rs. 500,000 per beneficiary, with a maximum repayment period of three years and an annual interest rate of 2%,” he explained.
Dr. Jayatissa said the scheme is designed to support a wide range of agricultural and agri-related activities, including cultivation, processing, value addition, input supply, crop procurement, facilitation, production, and exports.
He noted that individuals and institutions seeking to initiate or expand such activities will be eligible to access financing under the program.
“The Government views the Sustainable Agriculture Program as a key policy tool to boost productivity, encourage value addition, and improve incomes across the agricultural value chain, while ensuring that concessional credit is recycled through the revolving fund to benefit future borrowers,” he added.
Cabinet approval was granted for a proposal presented by President Anura Kumara Dissanayake in his capacity as Finance, Planning and Economic Development Minister.
