Relief period on Parate executions for SMEs extended

The Ministry of Finance announced an extension of the relief period on Parate executions for Small and Medium Enterprises (SMEs), as part of the government's ongoing efforts to support the revival of the sector. 

According to the Ministry, SMEs with loans below Rs. 25 million who contacted their banks on or before March 31, 2025, will now have until December 31, 2025, to benefit from relief measures. Those with borrowings between Rs. 25 million and Rs. 50 million have been given time until September 30, 2025, while businesses with loans exceeding Rs. 50 million can access assistance until June 30, 2025.

This extension follows the expiration of the earlier relief period on March 31, 2025, and is only applicable to SMEs that initiated discussions with their respective banks prior to that deadline.

Since the relief program began on December 15, 2024, a coordinated effort involving the Presidential Secretariat, Finance Ministry, Ministry of Industry and Entrepreneurship Development, Central Bank of Sri Lanka, Sri Lanka Banks’ Association (SLBA), and the Department of Development Finance has overseen the initiative’s progress on a monthly basis. 

Despite these measures, monitoring revealed that several SMEs had not approached banks. In response, the SLBA launched a multilingual awareness campaign across print and social media to encourage engagement. Many SMEs that did reach out successfully secured benefits such as reduced interest rates and extended repayment periods.

Although the formal relief window has now closed, banks remain open to assisting SMEs that act promptly. “We’re still ready to support those who come forward now,” the SLBA stated, urging eligible businesses to not delay further.

In line with the 2025 national budget, the government has allocated Rs. 20 billion in funding to boost SME investment and working capital — Rs. 15 billion for performing and non-defaulting SMEs, and Rs. 5 billion for defaulting SMEs that show potential for revival.

To fast-track disbursement to the non-performing sector, discussions were held among the Finance Ministry, Industry Ministry, Central Bank, Institute of Chartered Accountants of Sri Lanka, and SLBA. Under the resulting framework, qualifying SMEs vetted by the Ministry of Industry and Entrepreneurship Development will be referred to banks for funding access. Disbursements are contingent on guidelines from the Central Bank and a monitoring framework from the Institute of Chartered Accountants.

A Scorecard/Rating Mechanism developed earlier this year will be used to identify eligible SMEs for the Rs. 5 billion fund. This system is designed to encourage sustainable lending and is being shared with banks, the Ministry added.