Banking

Sri Lanka announces relief package for SMEs

Thursday January 16, 2025 5:56 pm

ECONOMYNEXT – Sri Lanka has developed a relief package for small and medium enterprises in collaboration with the Central Bank of Sri Lanka (CBSL), the Sri Lanka Banks’ Association (Guarantee) Ltd (SLBA), and SME sector representatives.

“The relevant measures have been prepared with a long term insight to provide a breathing space for the affected SMEs while ensuring the stability of the banking sector,” a government statement said.

The full statement is reproduced below:

Relief measures to assist the affected Small and Medium-sized Enterprises

Small and Medium-sized Enterprises (SMEs) sector has been identified as the most crucial sector of strategic importance to re-orient the country’s economy considering the sectorial contribution to the economy which is more than 50% to the country’s Gross Domestic Production.

Nevertheless, the recent upheavals experienced by the country during last few years, following the 2019 Easter Sunday Attack, the COVID-19 pandemic, 2022 economic collapse and other external impacts, have severely affected the SMEs, hindering their capacity significantly, grappling to conduct business as usual.

This affected their prompt repayment behavior and led to take legal actions by banks and threat of confiscation their securities/assets by the banks due to default.

For the period of 01.04.2019 to 30.09.2024, approximately 494,000 loans amounting to Rs. 886 Bn have been classified as stage 3 loans (Non-performing Loan – NPL) in the banking industry.

It is noted that 99% of number of loans categorized under stage 3 are below Rs. 25 Mn.

Considering all the factors, a relief package was designed by the government to support the SMEs who faced difficulties in servicing their debt due to the adverse impact experienced during the recent past.

The relief package was developed in collaboration with the Central Bank of Sri Lanka (CBSL), the Sri Lanka Banks’ Association (Guarantee) Ltd. (SLBA), SME sector representatives, applicable government agencies and the relevant measures have been prepared with a long term insight to provide a breathing space for the affected SMEs while ensuring the stability of the banking sector.

The SMEs which meet the below mentioned criteria are eligible to enter the proposed relief package.

i. SME borrowers obtained credit facilities from a licensed bank that have been classified as stage 3 (NPL) on or after 01.04.2019.

ii. SMEs which commence discussions with the respective Relief Banking Unit on or before 31.03.2025, subject to submission of all required documents.

(A) Specific reliefs

1. Specific relief measures have been proposed under three categories based on the aggregate capital outstanding of credit facilities available as of 15.12.2024 and each category is entitled to specific benefits which are shown in the Table below.

(B) General reliefs

1. Suspension of Parate Execution until 31.03.2025 making room for SMEs to enter a revival plan by amending the Recovery Loans by Banks (Special Provisions) Act No.4 of 1990.

2. If required, grant a working capital loan for eligible SMEs, subject to repayment capacity and submission of credible business revival plan on a case by case basis to re-boost them to their pre-crisis operating status.

3. An adverse ‘CRIB report’ shall not be the only reason for decline loan applications from eligible borrowers under this.

4. Licensed banks in consultation with the Credit Information Bureau of Sri Lanka may develop an appropriate reporting modality to report restructured credit facilities under this reliefs.

5. SMEs on their request to be provided with a breakdown of the capital, interest and other charges of their credit facilities from their bank.

(C) Additional relief measures

In addition to the aforesaid specific and general relief measures, the Ministry of Finance, Planning and Economic Development has requested the CBSL to explore the possibility to incorporate the following additional relief measures to the relief package in order to ensure the smoothimplementation and the maximum benefit to the SME sector.

1. Introduction of a reasonable interest rate for restructured loans less than Rs.50 Mn category subject to maximum of Average Weighted Prime Lending Rate (AWPR) plus (+) reasonable margin (Ex: Maximum 2%).

2. Maximum loan repayment period is 10 years (unless original agreement has provided a period longer than 10 years) subject to grievance handling process for aggrieved parties.

3. Rename ‘Business Revival Units’ of the respective banks as the ‘Relief Banking Units’.

4. Suspend all legal actions for cases during the proposed relief period i.e.12 months for loans less than Rs. 25 Mn, 09 months for loans between Rs. 25 Mn and Rs. 50 Mn and 06 months for loans above Rs. 50 Mn, including a complete freeze on legal proceedings related to NPL loans in the relevant categories, other than dates already scheduled.

5. Establish a transparent mechanism to grievance handling in the event of a dispute over the valuation for auctioning a property between banks and the defaulter which ensures the borrower’s property is auctioned at the highest possible rate to maximize its value.

(D) Additional policy measures to assist SME sector

1. Establish an Advisory Committee for SMEs under the leadership of Ministry of Industries as a prime arm for SME policy development, to provide guidance and coordinate all the relevant stakeholders’ work under different institutions for SME sector developments, gathering under one umbrella.

2. Introducing a scorecard/rating mechanism in collaboration with the Institute of Chartered Accountants of Sri Lanka and other professional accountant bodies to support SMEs to increase their ability to access finance.

3. Providing backup support by offering credit guarantees for bank loans of SMEs alleviating collateral issues in obtaining bank loans in collaboration with the National Credit Guarantee Institution Limited (NCGIL) which is to be commenced its operation from January 2025. (Colombo/Jan16/2025)

Markets

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

Friday November 13, 2026 3:28 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka MP slams budget speech for omitting Tamil national question

Friday November 13, 2026 2:56 pm

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

Bonds & Forex

Sri Lanka sells extra Rs6.5bn Treasury bills after auction

Friday November 13, 2026 12:32 pm

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

The settlement date is November 13. (Colombo/Nov13/2026)

Construction and Real Estate

Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

Friday November 13, 2026 12:15 pm

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka private sector says timely implementation of Budget 2027 key

Friday November 13, 2026 11:43 am

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)