January 25, Colombo (LNW): The International Finance Corporation (IFC), part of the World Bank Group, has unveiled a new financing package worth US$ 166 million in what the reports claimed as a move of strengthening Sri Lanka’s private sector and supporting the country’s shift from economic recovery to longer-term, sustainable growth.
The investment programme is designed to widen access to finance for small and medium-sized enterprises, with particular emphasis on women-led businesses and the agri-business sector. By directing funding towards these areas, the IFC hopes to encourage more inclusive growth while generating employment opportunities for groups that have traditionally struggled to secure financing.
The funds will be channelled through three leading private commercial banks — Nations Trust Bank, Commercial Bank of Ceylon and National Development Bank. The package includes a US$ 50 million loan, US$ 80 million in risk-sharing arrangements and US$ 36 million in trade finance guarantees, structured to strengthen lending capacity while reducing exposure for participating banks.
SMEs represent more than three-quarters of registered businesses in Sri Lanka and provide nearly half of all jobs, yet limited access to credit continues to constrain their expansion. The IFC says the initiative aligns with national priorities and the wider World Bank Group strategy by offering targeted financial solutions that help businesses navigate current challenges and build resilience against future shocks.
Senior IFC officials noted that the organisation often plays a stabilising role during periods of economic stress by stepping in when private investment slows. They said the latest commitment reflects confidence in Sri Lanka’s recovery and aims to help banks direct capital to priority sectors such as women-owned enterprises, small-scale agriculture and trade-linked businesses.
A key component of the programme is the US$ 50 million facility extended to Nations Trust Bank, marking the first IFC-backed debt investment in Sri Lanka’s financial sector since the 2022 economic crisis. A portion of this funding has been specifically set aside to expand lending to women entrepreneurs.
In addition, risk-sharing facilities of up to US$ 80 million will be established with Commercial Bank of Ceylon and National Development Bank. Under these arrangements, the IFC will absorb half of potential losses on eligible SME loan portfolios, encouraging banks to scale up lending to smaller businesses, including those in agriculture. The facilities are supported through blended finance mechanisms linked to the International Development Association.
Trade-related activity will also receive a boost through IFC-backed guarantees under its Global Trade Finance Programme. These guarantees, split between Nations Trust Bank and National Development Bank, are expected to improve access to international markets for local firms, particularly those that are underserved or export-oriented.
Beyond funding, the IFC will provide advisory support to modernise digital transaction systems and supply chain finance at National Development Bank, helping to expand credit access. Planned assistance will also strengthen the bank’s approach to managing climate-related financial risks, embedding sustainability considerations into its operations.
World Bank Group representatives said the initiative sends a positive signal to investors at a time when Sri Lanka is rebuilding from multiple economic and environmental shocks. They stressed that collaboration with the financial sector is essential to meet urgent needs while laying the groundwork for competitiveness and inclusive growth.
The latest investment builds on IFC’s more than five decades of engagement in Sri Lanka, during which it has maintained long-standing partnerships with leading financial institutions and supported reforms to improve access to finance. Recent efforts have included the launch of a secured transactions registry to help smaller businesses unlock credit using movable assets.
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