Business
Central Bank keeping watch on excessive lending rates still prevalent in the market
By Sanath Nanayakkare
Interest rates play a pivotal role in the financial landscape, significantly impacting micro and small businesses as well as marginal borrowers. The Island Financial Review learned from sources familiar with small business loans that some banks charge as high as 20% of interest from small business owners and self-employed people for loan amounts below Rs. one million, given out for a period of 2-3 years.
“While this might seem like mere numbers, interest rates can profoundly impact a small business’s survival or the very endurance of own-account workers who are self-employed and face many challenges in the informal economy. The current AWPR favours the top-end customers of the banks, and the small-timers have not been provided with any relief in the low-interest rate environment. In other words, they are not able to raise funds at a rate lower than their expected return rate. This situation presents small businesses with a difficult dilemma. In this context, the Central Bank Governor’s recent comments on this matter have been widely welcomed by borrowers who fall into the marginal category,” they said.
These sources referred to the following comments made by the Central Bank Governor Dr. Nandalal Weerasinghe presiding over last week’s Central Bank Policy Agenda meeting for 2025.
Touching upon excessive interest rates still prevalent in the market, Dr. Weerasinghe said:
“The Central Bank observes some excessive, outlier rates of interest on facilities extended to Micro, Small and Medium Scale Enterprises (MSMEs) as well as marginal borrowers and certain credit products which are not consistent with the prevailing relaxed monetary policy stance. Moreover, risks associated with lending are on the decline while the credit appetite of banks and financial institutions is improving given the overall stability and recovery witnessed in the economy. Therefore, with a view to making low-interest rate credit accessible, the Central Bank will closely work with banks and other financial institutions to reduce the excessive interest rates still prevalent in the market which are not consistent with the prevailing relaxed monetary policy stance.”
Being deliberate in balancing the scale, the Governor said,” While low interest rates have helped revive credit and contributed to improving the overall business sentiment, they could also disproportionately hurt savers. However, unlike during the high inflation episode, real returns on deposits have been positive, with inflation successfully being reined into low levels. Interest rates have their cycles, and the Central Bank will manoeuvre interest rates to ensure that inflation is kept low and stable with a view to promoting overall public welfare.”
By Sanath Nanayakkare
In a major boost to bilateral economic ties, the Chamber of Construction Industry of Sri Lanka (CCISL) and the Indo–Sri Lanka Chamber of Commerce & Industry (ISCCI) have signed a strategic Memorandum of Understanding (MoU) to deepen cooperation in real estate, infrastructure, and urban development.
The agreement establishes a formal framework for both institutions to drive collaborative initiatives, including business delegations, high-level conferences, workshops, B2B matchmaking sessions, and technical site visits. Designed to bridge businesses, government institutions, and project stakeholders across the Palk Strait, the partnership aims to unlock new avenues for cross-border joint ventures and technology transfers.
A focal point of this newly minted partnership is the facilitation of an upcoming trade delegation from the National Real Estate Development Council (NAREDCO) of India. Comprising major Indian players in the real estate and infrastructure sectors, the visiting delegation will engage in targeted business meetings, workshops, and inspection tours of prominent construction projects in Sri Lanka.
Under the terms of the MoU, CCISL will serve as the principal host coordinator in Sri Lanka. In close consultation with ISCCI, the apex construction body will curate itineraries, identify viable projects for engagement, and facilitate high-level dialogues with key government agencies, regulatory bodies, and industry leaders.
With both nations prioritizing sustainable urban growth, modern construction technologies, and infrastructure expansion, industry leaders view the partnership as a timely catalyst for economic rejuvenation. The collaboration is anticipated to accelerate market access, knowledge exchange, and foreign direct investment into Sri Lanka’s burgeoning property and development sectors.
To ensure the success of the upcoming NAREDCO delegation, CCISL has issued an urgent appeal to statutory authorities and relevant project owners to come forward with viable investment proposals. Stakeholders holding projects seeking foreign investment or technical partnerships are invited to submit comprehensive details to the Secretary General and CEO of CCISL via email at secyces@gmail.com.
Both chambers emphasize that translating this foundational agreement into tangible partnerships and robust capital flows will significantly strengthen bilateral connectivity between the construction and real estate sectors of India and Sri Lanka.
Hettich, the globally renowned German manufacturer of furniture fittings and architectural hardware known for its state-of-the-art manufacturing plants and magical interior solutions across the world celebrated a significant milestone in Sri Lanka, marking 10 years of presence in the country with its inaugural Partner Meet in Colombo.
The landmark event brought together Hettich’s key partners, stakeholders and industry leaders to celebrate a decade of growth, collaboration and shared success, while reaffirming the company’s long-term commitment to the Sri Lankan market.
Over the past decade, Hettich has strengthened its presence in Sri Lanka through its focus on German engineering, innovation, quality and functionality, contributing to the creation of contemporary and intelligently designed living and working spaces across the country.
The gala evening was graced by a distinguished delegation of senior leaders, including Dr. Andreas Hettich, Chairman, Hettich Group Advisory Board; S. K. Poddar, Chairman, Hettich India & Adventz Group; Mr. Akshay Poddar, Director, Hettich India; Andre Eckholt, Managing Director, Hettich India, SAARC, Middle East & Africa; Rahul Thakkar, Director – Sales, Hettich India & SAARC; and Dinusha Bhaskaran, Managing Director, Vallibel One PLC.
GS Evo Motors Limited, the authorized distributor of JMEV electric vehicles in Sri Lanka, has officially launched the JMEV EWIND, a next-generation compact electric SUV. The vehicle is designed to offer strong performance, intelligent technology, premium comfort, and high safety standards, marking another milestone in Sri Lanka’s growing electric mobility sector.
The EWIND features a sleek, aerodynamic exterior with penetrating LED daytime running lights, trapezoidal chain-inspired LED tail lamps, 19-inch alloy wheels, and a bold silhouette. Inside, it offers a spacious cabin with a panoramic moonroof and retractable curtain, an ultra-thin suspended instrument panel, a D-shaped multifunction steering wheel, multi-colour ambient lighting, premium finishes, and electrically adjustable front seats.
The SUV is available in single-motor front-wheel drive configurations, producing up to 108 kW and 210 Nm, with 0–100 km/h acceleration in 8.9 seconds.
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