By: Staff Writer
August 13, Colombo (LNW): Sri Lanka’s Women Entrepreneurs Finance Code has moved from policy commitment to measurable implementation, but its first annual report also exposes why expanding finance for women entrepreneurs will require more than increasing the number of approved loans.
The country adopted the WE Finance Code in March 2025 with technical assistance from the Asian Development Bank, becoming the first South Asian country to adopt the global initiative. The inaugural Annual Report 2025/2026 now provides a baseline against which future progress can be judged.
Its figures are substantial. Thirteen signatory financial institutions serviced more than 965,000 MSME business credit customers, including over 200,000 women-owned or women-led MSMEs. During the first year, 36,087 business loans were approved for women-owned or women-led businesses, representing approximately LKR 145.5 billion in financing.
But implementation faces a more fundamental challenge: reaching entrepreneurs who remain outside the formal financial system.
Women account for 34% of Sri Lanka’s economically active population and operate businesses across agriculture, manufacturing, exports, services, retail and other sectors. Yet many continue to face limited access to credit, insufficient collateral, low digital adoption and weak market linkages. These barriers can prevent entrepreneurs from becoming visible to lenders in the first place.
The Code attempts to address that problem through a national definition of women-owned and women-led businesses. The Central Bank of Sri Lanka has incorporated the definition into a circular requiring financial institutions to collect and report gender-disaggregated data on their MSME lending.
This is an important institutional reform because inconsistent definitions can make it difficult to determine who is actually benefiting from gender-focused finance. However, reporting more data creates value only if institutions use it to identify underserved groups and redesign products accordingly.
There is also a risk that formal reporting becomes an exercise in compliance rather than a mechanism for changing lending behaviour. The real implementation test will be whether financial institutions use the new data to understand why women entrepreneurs are rejected, under-financed or unable to meet conventional borrowing requirements.
The report itself points to the wider ecosystem needed to make financing effective. Business planning, financial literacy, digital adoption, formalisation, market access and mentorship are identified alongside credit as essential areas of support.
That broad approach matters because finance can fail to produce sustainable business growth when entrepreneurs lack the capacity, networks or markets needed to use capital productively.
Deloitte, which supported the Ministry of Finance, Planning and Economic Development and the Asian Development Bank in operationalising the Code, contributed to the national definition, gender-disaggregated data framework and stakeholder coordination.
The Draft National Action Plan for Gender Inclusive Financing for May 2026 to May 2030 now offers a longer-term roadmap. Its effectiveness will depend on execution, accountability and coordination across government, regulators, banks and development partners.
The first report establishes that Sri Lanka can measure participation and lending. The harder challenge begins now: ensuring the system reaches women beyond existing banking networks and converts financial access into durable business growth.
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