The International Finance Corporation has announced a $166 million investment program to support Sri Lankan businesses and help the country move from economic stabilization toward sustainable and inclusive growth. The investment, unveiled in Colombo, reinforces IFC’s long-standing commitment to Sri Lanka’s private sector and is designed to strengthen the financial system at a critical moment in the country’s recovery.
The country-level financing package focuses on expanding access to finance for small and medium-sized enterprises, with particular attention to women-owned businesses and the agri-business sector. By targeting these segments, the investment aims to unlock job creation, promote inclusive growth, and support underserved groups that play a vital role in Sri Lanka’s economy.
The $166 million investment has been channelled through three leading private commercial banks: Nations Trust Bank, Commercial Bank of Ceylon, and National Development Bank. The package includes a $50 million loan, $80 million in risk-sharing facilities, and $36 million in trade finance support. This structure is intended to strengthen bank lending capacity while reducing risk and encouraging greater credit flow to SMEs.
Although SMEs represent more than three-quarters of all businesses in Sri Lanka and account for nearly half of total employment, limited access to credit continues to constrain their growth. IFC’s partnership with local banks aligns with national priorities and World Bank Group objectives, aiming to address these financing gaps and strengthen the country’s long-term economic resilience.
As part of the investment, IFC provided $50 million in financing to Nations Trust Bank, marking the first IFC-funded debt investment in Sri Lanka’s financial sector since the 2022 economic crisis. A portion of this funding has been earmarked specifically for women-owned SMEs, helping to improve access to finance for women entrepreneurs and support gender-inclusive growth.
In addition, IFC has partnered with Commercial Bank of Ceylon and National Development Bank to establish up to $80 million in risk-sharing facilities. Under these arrangements, IFC will absorb half of the potential losses on eligible SME loan portfolios, encouraging banks to expand lending to SMEs, including women-led enterprises and agri-businesses. These facilities are supported by blended finance mechanisms designed to de-risk and scale up SME financing.
To further strengthen trade and market access, IFC’s Global Trade Finance Program is providing $36 million in trade finance guarantees to Nations Trust Bank and National Development Bank. This support is expected to enhance the banks’ ability to connect underserved sectors to global markets and supply chains, improving trade flows and business competitiveness.
Beyond financial support, IFC will deliver technical assistance to modernize National Development Bank’s digital transaction banking and supply chain finance systems, expanding credit access for underserved SMEs. Advisory support will also help strengthen the bank’s climate risk management framework, integrating climate considerations into its long-term strategy and operations.
These investments build on IFC’s 55-year partnership with Sri Lanka and its continued role as a long-term investor and shareholder in key financial institutions. By combining financing, risk mitigation, and technical expertise, IFC aims to support Sri Lanka’s recovery, strengthen confidence in the financial sector, and lay the groundwork for sustainable and inclusive economic growth.
