By: Staff Writer
December 09, Colombo (LNW): Sri Lanka’s decision to roll out a Rs. 80 billion loan scheme for new entrepreneurs in January comes at a time when micro, small, and medium enterprises (MSMEs) the bedrock of the national economy are suffering unprecedented losses after the recent cyclone disaster.
According to preliminary assessments by the Disaster Management Centre and provincial authorities, over 92,000 MSMEs have been directly affected nationwide, with nearly 28,000 reporting complete or near-total damage to machinery, production lines, or inventory. An estimated 350,000 workers face reduced income or temporary unemployment as a result of disrupted operations. These figures highlight the scale of economic pain at the grassroots level and fuel debate on whether the government’s new lending scheme addresses the country’s most urgent needs.
Industry and Entrepreneurship Development Minister Sunil Handunneththi told the Ministerial Consultative Committee that the Rs. 80 billion allocation in the 2026 Budget will be channelled through a joint programme involving the Finance Ministry and the banking sector.
The intention, he said, is to deliver “more effective and targeted lending” for new entrepreneurs. MPs will receive a full sector-eligibility briefing and access-mechanism guide in January.
However, MSME chambers argue that existing enterprises require immediate bridge financing, not long-term entrepreneurial stimulation. With tens of thousands of firms unable to restart operations and supply chains collapsing, business groups warn that without urgent recovery assistance, Sri Lanka risks permanent MSME attrition, undermining the economy’s productive capacity for years.
To strengthen policy coordination, the Ministry will also introduce a National Database for Industrialists, integrating all industrial and enterprise information into a unified platform. Officials say this will streamline service access and improve transparency in future support schemes. A nationwide promotional campaign will encourage entrepreneurs and MSMEs to register.
The Committee further explored a proposal to expand collateral-free lending to craftsmen registered with the National Crafts Council. Members highlighted its potential to revive micro-craft industries, especially in rural areas where cyclone damage has severely disrupted household economies. Yet, critics note that without widespread disaster-relief credit, such initiatives may be insufficient to counter the massive financial shock faced by MSMEs.
In a more positive development, National Paper Company Ltd. reported a production jump from 150–180 tons to 400 tons per month after recent operational reforms evidence, officials say, that targeted state support can deliver rapid results.
The meeting also reviewed a newly designed National Advisory Framework for excavation permits, aimed at replacing fragmented approval systems with a unified structure from January.
As Sri Lanka moves ahead with the Rs. 80 billion entrepreneur-loan programme, a pressing question hangs over the economy: Can the country afford to prioritise new enterprise creation while thousands of MSMEs the true backbone of economic activity, are fighting for survival? The government’s ability to balance long-term growth with urgent recovery will determine whether this initiative becomes a catalyst for economic revival or a strategic misstep.
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