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Vehicle loans surge to Rs. 1.16 trillion in first half of 2025 - Central Bank
- Increased level of vehicle imports had also boosted government revenue, enabling the state to surpass its fiscal targets for 2025
- Lifting of vehicle import restrictions in February triggered higher-than-expected demand, leading to a surge in vehicle loans
By Vimuththi S. Rodrigo
Colombo, Oct. 24 (Daily Mirror) - The Central Bank of Sri Lanka (CBSL) announced that by the end of the first six months of 2025, financial institutions in the country had granted a total of Rs. 1,161 billion (approximately) as vehicle-backed loans, reflecting strong demand following the easing of import restrictions earlier this year.
According to CBSL Deputy Governor J. P. R. Karunaratne, the majority of these loans were issued under leasing facilities, while the second-largest share consisted of mortgage-based vehicle loans. He made these remarks during a media briefing held on Wednesday (23) to present the Financial Soundness Indicators Q2 of 2025.
The Central Bank further revealed that the total gross loans and advances of the Licensed Finance Companies (LFC) sector during the first half of 2025 amounted to Rs. 1,837 billion. Of this total, vehicle-backed loans accounted for 63.2%, representing an approximate value of Rs. 1,161 billion.
The report also noted that gold-backed loans made up a further 19.4% of total lending within the sector.
Meanwhile, the banking sector provided Rs. 1,010.3 billion in loans to households, equivalent to 40.7% of total private sector lending. This marks a 14.8% increase compared to Rs. 736.4 billion issued during the same period in 2024. The Western Province recorded the highest concentration of household borrowing.
Speaking at the briefing, Central Bank Governor Dr. Nandalal Weerasinghe said that the lifting of vehicle import restrictions in February triggered higher-than-expected demand, leading to a surge in vehicle loans.
“The sharp rise in demand was a natural response after nearly five years of accumulated need,” Dr. Weerasinghe explained. “As that backlog is being met, vehicle demand is now gradually stabilizing and is expected to return to normal levels next year.”
He added that the increased level of vehicle imports had also boosted government revenue, enabling the state to surpass its fiscal targets for 2025.
While the Central Bank had initially estimated vehicle imports at around USD 1.2 billion for the year, Dr. Weerasinghe noted that the actual figure could exceed USD 1.5 billion by year’s end.
However, CBSL officials clarified that detailed data differentiating between leasing and mortgage-based vehicle loans are not yet available.
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