International Finance Corporation (IFC), a member of the World Bank Group, has announced a financial package totaling USD 166 million in loans and credit guarantees to Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB). This package comprises a USD 50 million loan, USD 80 million in Risk-Sharing Facilities (RSFs), and USD 36 million in trade finance support.
The financing is primarily aimed at supporting small and medium-sized enterprises (SMEs), with a particular emphasis on empowering women-owned businesses and the agri-business sector. “SMEs are the undisputed backbone of Sri Lanka’s economy, and their growth is essential for creating jobs,” stated Allen Forlemu, IFC Regional Industry Director, Financial Institutions Group, Asia and the Pacific. “By helping banks channel capital to women-led businesses, smallholder farmers, and the sectors driving recovery, we are enabling Sri Lanka not just to rebound, but also to grow forward with greater resilience and inclusivity. During periods of crisis, IFC plays a critical counter-cyclical role by stepping in when private capital pulls back – and this investment in Sri Lanka’s financial sector reflects that commitment.”
Sri Lanka’s private credit has seen significant growth in recent months amid lower inflation, although concerns remain regarding the latest rate cut. “Strengthening the country’s financial ecosystem means equipping banks with the capacity, tools, and confidence to extend finance where it is most needed – from expanding trade finance capabilities to modernizing digital transaction systems,” noted Imad Fakhoury, IFC Regional Division Director for South Asia. “In partnership with NTB, CBC, and NDB, our investments aim to build a foundation that empowers SMEs and communities to plan ahead, withstand future shocks, and participate fully in the opportunities that a competitive, inclusive economy can deliver.”
The USD 50 million allocated to NTB marks IFC’s first debt investment in Sri Lanka’s financial sector following the 2022 economic crisis. Approximately USD 7.5 million, or 15 percent of this investment, is designated for on-lending to women-owned SMEs, enhancing access to credit for women entrepreneurs. IFC is also providing CBC with USD 60 million and NDB with USD 20 million in risk-sharing facilities. Under these facilities, IFC will cover 50 percent of the principal losses incurred by the banks on a portfolio of eligible SME loans, thus accelerating the banks’ commitment to expanding lending to SMEs, including women-owned SMEs and agri-businesses.
These facilities are supported by the IDA Private Sector Window Blended Finance Facility, through the Small Loan Guarantee Program (SLGP), a programmatic approach to de-risking and scaling up financing for SMEs in eligible countries, including Sri Lanka. Furthermore, IFC’s Global Trade Finance Program (GTFP) will provide a USD 36 million trade finance facility guarantee to NTB and NDB, enhancing their trade finance capabilities. The trade finance lines include USD 20 million for NTB and USD 16 million for NDB, aimed at improving the banks’ ability to provide underserved sectors with access to global markets and supply chains.
(Colombo/Jan25/2026)
