Reinforcing its longstanding commitment to Sri Lanka’s private sector, the International Finance Corporation (IFC), a member of the World Bank Group, yesterday announced a high-impact investment programme of $166 million to support Sri Lankan businesses and accelerate the country’s transition from economic stabilisation to sustainable growth.

This comprehensive country-level financing package aims to expand financial access for small and medium-sized enterprises (SMEs), with a focus on empowering women-owned businesses and the agri-business sector. By targeting these key areas of Sri Lanka’s economy, the financing seeks to drive inclusive growth and unlock job opportunities for underserved groups.

This investment has been made strategically in three of Sri Lanka’s leading commercial private banks – Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB) – comprising a $50 million loan, $80 million in Risk-Sharing Facilities (RSFs), and $36 million in trade finance support.

While SMEs account for over 75 percent of all Sri Lankan businesses and 45 percent of jobs, access to credit remains a significant barrier to their expansion. Aligned with both the World Bank Group and key national priorities, this partnership aims to deliver targeted solutions for SMEs, helping businesses overcome challenges and supporting the country’s long-term economic resilience.

“SMEs are the undisputed backbone of Sri Lanka’s economy, and their growth is essential for creating jobs. During periods of crisis, IFC plays a critical counter-cyclical role by stepping in when private capital pulls back – and this investment in Sri Lanka’s financial sector reflects that commitment. By helping banks channel capital to women-led businesses, smallholder farmers, and the sectors driving recovery, we are enabling Sri Lanka not just to rebound, but also to grow forward with greater resilience and inclusivity,” said Allen Forlemu, IFC Regional Industry Director, Financial Institutions Group, Asia and the Pacific.

“As part of our One World Bank Group approach, IFC is dedicated to unlocking new inclusive financing streams and ensuring that prosperity reaches the front lines of Sri Lanka’s economy. Strengthening the country’s financial ecosystem means equipping banks with the capacity, tools, and confidence to extend finance where it is most needed – from expanding trade finance capabilities to modernising digital transaction systems. In partnership with three leading banks, NTB, CBC and NDB, our investments aim to build a foundation that empowers SMEs and communities to plan ahead, withstand future shocks, and participate fully in the opportunities that a competitive, inclusive economy can deliver,” said Imad Fakhoury, IFC Regional Division Director for South Asia.

IFC’s financing of $50 million to NTB, marks the first IFC-funded debt investment in Sri Lanka’s financial sector following the 2022 economic crisis. Of the total financing, $7.5 million or 15 percent is earmarked for on-lending to women-owned SMEs, enabling greater access to credit for women entrepreneurs.

Further, IFC has partnered with CBC and NDB to establish up to $80 million in RSFs. Under the facilities, which consist of $60 million for CBC and $20 million for NDB, IFC will share 50 percent of the principal losses incurred by the banks on a portfolio of eligible SME loans. This strategic intervention will help accelerate the banks’ strong commitment to expanding lending to SMEs, including to women-owned SMEs and agri-businesses. These facilities are supported by the IDA Private Sector Window Blended Finance Facility, through the Small Loan Guarantee Programme (SLGP), a programmatic approach to de-risking and scaling up financing for SMEs in eligible countries, including Sri Lanka.

IFC’s Global Trade Finance Programme (GTFP) will provide a $36 million trade finance facility guarantee to NTB and NDB, strengthening their trade finance capabilities. The trade finance lines consist of up to $20 million for NTB and $16 million for NDB and aim to enhance the banks’ ability to provide underserved sectors with access to global markets and supply chains.

Beyond financing, IFC will also deliver technical expertise to modernise NDB’s digital transaction banking and supply chain finance systems, directly expanding credit access for underserved SMEs. The upcoming advisory support also includes a comprehensive upgrade of NDB’s climate risk management framework, integrating climate considerations into the bank’s strategy and operations.

“As Sri Lanka rebuilds following multiple shocks – including the recent devastation caused by Cyclone Ditwah – IFC’s collaboration with leading financial institutions is instrumental in addressing urgent needs while laying the foundation for long-term competitiveness. These investments send a strong signal of confidence to the market,” said Gevorg Sargsyan, Country Manager for the World Bank Group in Sri Lanka and the Maldives. “The World Bank Group is committed to working across sectors and with partners to ensure our support has real impact when Sri Lanka needs it most. Our unwavering focus is on promoting sustainable and inclusive growth, so that every community has the opportunity to participate in and benefit from the country’s progress.”

These investments build on IFC’s 55-year history in Sri Lanka. IFC remains a long-term partner and shareholder in the country’s leading financial institutions, holding an equity interest in CBC and maintaining decades-long relationships with NDB and NTB.

Recently, IFC also helped strengthen Sri Lanka’s financial infrastructure by launching a Secured Transactions Registry (STR), enabling greater credit access for SMEs.