Sri Lanka launches first climate resilience revolving fund for MSMEs

Chrysalis CEO Ashika Gunasena

In a landmark step towards strengthening the resilience of micro, small and medium-sized enterprises (MSMEs) against climate-induced disasters, Chrysalis, with the support of CARE Germany, officially launched Sri Lanka’s first climate resilience revolving fund for MSMEs.

The initiative, co-funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), European Union and Co-Impact and implemented by Chrysalis, is part of the broader Climate and Disaster Risk Financing and Insurance (CDRFI) framework. It aims to safeguard livelihoods, accelerate post-disaster recovery and embed long-term resilience practices among MSMEs in the Uva and Central provinces.

The newly launched revolving fund will provide rapid financial support through MSME consortia in Badulla, Monaragala, Matale and Nuwara Eliya, enabling quicker recovery, safeguarding women’s economic participation and ensuring business continuity in the aftermath of disasters.

Programme Coordinator MAP II CARE Germany Representative Hannah Bartels emphasised, “With the leadership of the BMZ and commitment of global partners, this initiative in Sri Lanka illustrates how international funding can directly strengthen resilience at the community level.”

Chrysalis CEO Ashika Gunasena said, “SMEs are the backbone of Sri Lanka’s economy but women-owned businesses are hit hardest by floods, droughts and other climate shocks. Building climate resilience is not just about protecting enterprises, it is about safeguarding women’s livelihoods and strengthening communities.”

The initiative is a multi-actor collaboration involving government ministries, private sector financial institutions, civil society organisations and development partners. By linking disaster risk financing directly to MSME consortia, the fund not only supports immediate recovery but also fosters long-term resilience practices that can be scaled nationally.

The launch event also featured discussions on integrating CDRFI into Sri Lanka’s national SME policy, the development process of the revolving fund and the symbolic handover of the first round of grants to MSME consortia. It provided a platform for policymakers, private sector actors and development partners to explore scalable solutions for climate risk preparedness.