National Credit Guarantee Institution debuts in boost to MSMEs

• NCGIL aims to support MSME lending by providing partial credit guarantees, helping creditworthy but collateral-poor businesses
• ADB Director-General Sector Department-3 Leah Gutierrez says since January 2025, NCGIL has backed 116 MSMEs with Rs. 406 m in guarantees, focusing on women-led and green businesses
• Notes MSMEs represent 52% of GDP, make up 45% of employment, but get just 9% of private credit, highlighting financing gap NCGIL targets
• States ADB support includes $ 50 m loan, $ 1 m in technical assistance and international expertise for operational setup
• Asserts ADB has invested $ 440 m in SME credit lines since 2016, plus $ 7.4 b in trade finance, reinforcing long-term SME commitment
• Emphasises digital-first model, gender-focused lending and regional inclusivity as keys to sustained SME growth

By Charumini de Silva

ADB Sector Department-3 Director General Leah Gutierrez

The Asian Development Bank (ADB) yesterday hailed the official launch of the National Credit Guarantee Institution Ltd., (NCGIL), a transformative step in Sri Lanka’s efforts to enhance finance access for the country’s micro, small and medium enterprises (MSMEs).



Speaking at the launch, ADB Director-General Sector Department-3 Leah Gutierrez highlighted the critical importance of the new institution, calling it a “milestone in Sri Lanka’s financial sector development” and a testament to public-private innovation in driving inclusive growth.

“Healthy financial sectors are vital for economic growth, private sector development, and job creation. In Sri Lanka, MSMEs represent 52% of the GDP and contribute to around 45% of employment in the workforce and over 75% of active enterprises. Yet, they received only 9% or Rs. 704 billion of private sector credit in 2024, showcasing the vast financing gap that continues to hinder their full potential,” she pointed out.

Against this backdrop, she said the establishment of the NCGIL, in partnership with the ADB, Finance Ministry, and the Central Bank of Sri Lanka, is designed to directly address this gap by issuing partial credit guarantees that encourage financial institutions to lend to creditworthy MSMEs that lack traditional collateral.

“Since its operational start in January 2025, the NCGIL has already issued Rs. 406 million in partial credit guarantees, supporting 116 MSMEs with a special focus on women-owned enterprises and climate-friendly financing,” she stated.

Gutierrez also noted that the ADB played a key role in the formation and operationalisation of the NCGIL with a $ 50 million loan for the Government’s equity stake, followed by $ 1 million technical assistance to support board governance, operational frameworks, credit risk manual and staff training, as well as deployment of international experts to guide guarantee structures and digital platforms in the institution’s formative months.

She commended the NCGIL’s digitally driven model and its commitment to streamlining services for lenders and borrowers alike. “The digital-first strategy adopted by the NCGIL will be key to scaling its impact,” she added.

Gutierrez also noted that the ADB has provided $ 440 million in credit lines to Sri Lankan MSMEs since 2016 through 13 partner financial institutions. 

“These programs focused on; gender-focused lending, environmental and social safeguards, and support for underserved regions and priority sectors,” she said.

In addition, she said the ADB has backed the Regional Development Bank with an innovative $ 50 million capital-boosting loan, enabling greater SME outreach, and introduced the WE Finance Code, which brings together 13 banks to align with best practices in gender-responsive lending. 

She said from 2014 to April 2025, through the ADB’s Trade and Supply Chain Finance Program, over 3,700 transactions were supported in Sri Lanka, amounting to $ 7.4 billion, including $ 5.2 billion co-financed by private institutions. 

Gutierrez commended the NCGIL’s management and staff for achieving rapid operational success and reaffirmed the ADB’s ongoing commitment.