Seylan Bank with National Credit Guarantee Institution empowers MSMEs

The government of Sri Lanka, working with the Asian Development Bank (ADB), has introduced a special programme for micro, small, and medium enterprises (MSMEs). This initiative allows the MSMEs lacking adequate collateral to obtain loans through 13 selected banks and financial institutions, including Seylan Bank. 

Through the collaborative launch of National Credit Guarantee Institution Ltd (NCGIL), the Bank with a Heart’s support reaffirms its continued commitment to inclusive financial empowerment and holistic simplified solutions aimed at strengthening national economic development.

Through NCGIL’s enabling of uncollateralised lending through partial credit guarantees, the banks will be able to assess entrepreneurs based on cash flow and business viability other than asset security, marking the first national-scale, risk-sharing credit guarantee model introduced in Sri Lanka, with Seylan Bank playing a critical role in its implementation. 

Backed by the government, the Finance and Economic Stabilisation and National Policies Ministry and ADB, NCGIL aims to resolve the limited access to capital due to insufficient collateral that functions as a persistent barrier to success for the MSMEs. 

The initiative will allow the MSMEs to fund capital expenditure and permanent working capital needs with eligible loans ranging from Rs.500,000 to Rs.25 million. NCGIL will secure up to 67 percent of qualifying loans, in case of eventuality under the guarantee scheme. Additionally, a guarantee fee of one percent to 2 percent per annum, based on the business’ risk profile, will be applicable and recovered annually on the outstanding guaranteed amount. Special consideration is afforded to priority sectors including women-owned or managed businesses, manufacturing enterprises, tourism, agriculture and information technology and export-oriented industries.

As part of this initiative, the LIYA SHAKTHI Guarantee Scheme has been introduced to strengthen access to finance for women-owned and women-led MSMEs. This programme provides enhanced guarantee coverage of up to 80 percent of the loan amount or capital outstanding, compared to the 67 percent coverage available under the standard guarantee scheme currently operated by NCGIL. By supporting women entrepreneurs with greater financial security, LIYA SHAKTHI aims to empower female-led enterprises and encourage their active contribution to Sri Lanka’s economic growth.

Working to accommodate applications for the MSME loans under the NCGIL scheme, Seylan Bank’s goals of enabling transformation and empowering power with solutions aligns with the initiative’s purpose to encourage aspiring entrepreneurs and underserved business owners. 

Through NCGIL, Seylan Bank aims to expand access to sustainable credit, helping unlock the untapped potential of Sri Lanka’s MSME sector while contributing to national economic resilience and inclusive growth.

Seylan Bank Chief Operating Officer Ranil Dissanayake said, “As a flexible financing option, we’re excited to support NCGIL as it moves to back the aspirations of businesses that will potentiate an economic boom by driving innovation, job creation and community upliftment.”