People’s Bank Strengthens Support for Micro, Small and Medium Enterprises in Sri Lanka

Mr. Wickrama Narayana  Deputy General Manager – SME,  Development and Micro Finance at People’s Bank

In a recent discussion, Wickrama Narayana, Deputy General Manager–SME, Development and Micro Finance at People’s Bank, emphasised the bank’s unwavering commitment to strengthening Sri Lanka’s MSME sector. He highlighted the strategic importance the bank places on empowering micro, small, and medium enterprises as a cornerstone of building a resilient and inclusive economy. With a renewed focus on sustainability, innovation, and grassroots development, People’s Bank continues to align its efforts with national priorities, driving meaningful support for entrepreneurs across the island.

Q Can you provide an overview of People’s Bank’s commitment to supporting Small and Medium Enterprises (SMEs) in Sri Lanka? What is the significance of the SME sector in Sri Lanka’s economy?

Our goal is to develop many successful customers through People’s Bank ideally, creating local businesses that develop into global brands at least in the presence of 25–50 countries. Instead of just exporting products like Ceylon cinnamon, we want to build authentic global brands. We’ve started training programmes for this and envision a dedicated strategic aim for global brand development.

Q How does People’s Bank align its strategy to support this sector?

As a state bank, we align with government policy focusing on SMEs, which likely contribute more than the reported 52% of GDP. Like Malaysia and Japan, Sri Lanka is seeing growth in young entrepreneurs, especially graduates. Since 2023, we’ve shifted from lending mainly to government enterprises to supporting MSMEs, prioritising youth, women-led, and export-focused businesses in line with national goals.

Q What specific financial products and services does People’s Bank offer to SMEs. Are there any tailor-made loan schemes or credit lines designed especially for SME growth and expansion?

For the micro level, beyond refinance schemes, the bank offers subsidized government-backed loans like NCRCS cultivation loans, paddy stocking, Credit, ADB programmes, and NEDA recommended loans up to Rs. 15 million. Our own microfinance products include Aswenna, Vanithā Saviya (women entrepreneurs), Kapruka (coconut cultivation), and People’s Power Loan (up to Rs. 5 million). For SMEs, key loans are Business Power (up to Rs. 250 million), Green Power (renewable energy), and People’s Spark (youth loans up to Rs. 500,000 with mentoring). We focus on credit plus guidance to help startups and small businesses grow sustainably.

Q What are the eligibility criteria and application process for SMEs seeking financial support from People’s Bank?

Our MSME loans follow Central Bank guidelines. Micro businesses have turnover up to Rs. 20 million with max 5 employees; SMEs up to Rs. 1 billion turnovers. Applicants should be under 60 years or partnered with a younger co-applicant and have a viable business in trading, manufacturing, or value addition.

Lending primarily focuses on cash flow, with collateral required only for high-risk cases. We prioritise entrepreneurial drive and support startups to succeed, while ensuring responsible recovery of depositor’s funds.

Q Does People’s Bank provide any advisory or mentoring services for SMEs (e.g., financial literacy, business planning, digital transformation)?

With the People’s Spark loan, we start by helping applicants develop a solid business plan, not just to access funding, but to understand why planning matters. Alongside, we provide financial mentoring, which focuses on behavioral change (like curbing unnecessary expenses) and building discipline needed for business success.

Our staff, especially managers, are trained in both mentoring and financial advisory, teaching customers how to manage money, understand interest rates, and use financial tools effectively. This holistic approach goes beyond lending. It’s about building long-term relationships and helping entrepreneurs succeed, because banking today is more than just giving out loans, it’s about walking the journey with the customer.

Q How does People’s Bank leverage technology to make banking more accessible and efficient for SME customers? Are there any digital platforms, mobile apps, or online banking tools designed specifically for SME clients?

Our digital transformation has three key stages. It began with automating back-office operations, then moved to customer-facing digital platforms like People’s Wave, People’s Pay, and Corporate Internet Banking—available to individuals and businesses alike. Now, most retail transactions and about 70% of commercial lending are processed digitally, minimising paperwork. We’ve also introduced digital loan origination systems. Overall, our goal is to reduce branch visits and provide full banking services online, making banking faster, easier, and more accessible.

Q Does People’s Bank offer special support for women-led or youth-led SMEs?

We have a dedicated Women Entrepreneurship Policy, and a strategic initiative called ‘Her Business Solutions’ to empower women entrepreneurs. Through SME Connect and Entrepreneurship Villages, we offer mentoring, business planning, and group loan support. Our women-focused loan product Vanitha Saviya now allows borrowing up to Rs. 25 million. With training programmes and strong female staff, we aim to grow more women-led businesses across Sri Lanka.

Q Are there any initiatives encouraging SMEs to adopt sustainable or green business practices?

We follow a Sustainable Finance Policy aligned with Sri Lanka’s green taxonomy to identify and support sustainable projects. We’ve allocated Rs. 10 billion at a concessional AWPLR rate, with Rs. 4 billion already disbursed and more in the pipeline. Projects include Solar projects, locally made electric three-wheelers (used beyond transport, like mobile cafes) and precision agriculture. A dedicated Green Officer and Committee oversee these efforts to ensure impactful, eco-friendly lending.

Q What metrics or KPIs does People’s Bank use to measure the impact of its SME support initiatives?

We measure success by the number of supported projects, new customers, young and women entrepreneurs, and overall loan growth. Our goal is to expand lending beyond State Owned Enterprises to SMEs and corporates, a big cultural shift since branch managers were used to lending mainly to government entities. Replacing the lost government lending volume of around $300 billion is a major challenge, but we’re committed to this shift to boost GDP and employment, with the government’s supports.

Q What are People’s Bank’s strategic goals for SME banking over the next 3 to 5 years? Are there any upcoming products, campaigns, or programs targeting SME development?

Our strategic goal is relationship lending, actively reaching out to customers rather than waiting for them to come to us. Branch managers are being trained to engage directly with clients, understand their needs, and offer mentorship. The banking system has ample liquidity, but many customers aren’t ready to borrow yet, so we’re preparing them.

We’re also supporting a new development bank focused on project lending, which differs from commercial lending by providing advisory and partnership support for largescale projects. This approach aims to revive development banking in the country.

Additionally, on June 27-28, we’re hosting a major trade fair in Gampaha to showcase business models, support customer growth, and offer technical assistance alongside government agencies, making it more than just a typical trade fair.

Q What would be your final or sort of end goal um with reference to SMEs? in terms of people’s bank?

Our goal is to develop many successful customers through People’s Bank, ideally, creating local businesses that grow into global brands present in 25–50 countries. Instead of just exporting products like Ceylon cinnamon, we want to build authentic global brands. We’ve started training programmes for this and envision a future dedicated Strategic aim to global brand development.