IFC announces $166 million financing package to support Sri Lankan businesses

The International Finance Corporation (IFC), a member of the World Bank Group, has announced a $166 million investment program aimed at supporting Sri Lankan businesses and strengthening the country’s private sector as it moves from economic stabilization toward sustainable growth.

According to IFC, the country-level financing package is designed to expand access to finance for small and medium-sized enterprises (SMEs), with special focus on women-owned businesses and the agri-business sector. The initiative is expected to support inclusive growth and create job opportunities in underserved segments of the economy.

The investment has been structured through three leading private commercial banks, Nations Trust Bank (NTB), Commercial Bank of Ceylon (CBC), and National Development Bank (NDB). It includes a $50 million loan, $80 million in Risk-Sharing Facilities (RSFs), and $36 million in trade finance support.

SMEs account for more than 75 percent of businesses in Sri Lanka and provide around 45 percent of employment, but access to credit remains a key challenge to their expansion. IFC said the financing aligns with national priorities and World Bank Group objectives to strengthen economic resilience and long-term growth.

“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 modernizing 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 stated that $50 million of the financing has been extended to NTB, marking the first IFC-funded debt investment in Sri Lanka’s financial sector since the 2022 economic crisis. Of this amount, $7.5 million, or 15 percent, has been allocated for on-lending to women-owned SMEs.

In addition, IFC has partnered with CBC and NDB to establish RSFs of up to $80 million. Under these facilities, IFC will share 50 percent of principal losses on eligible SME loan portfolios, with $60 million allocated to CBC and $20 million to NDB. These facilities are supported by the IDA Private Sector Window Blended Finance Facility through the Small Loan Guarantee Program.

Under IFC’s Global Trade Finance Program, a $36 million trade finance guarantee facility will be provided to NTB and NDB. The facility includes up to $20 million for NTB and $16 million for NDB, with the aim of improving access to global markets for underserved sectors.

Beyond financing, IFC will also provide technical assistance to NDB to modernize its digital transaction banking and supply chain finance systems. Advisory support will also include upgrades to NDB’s climate risk management framework.

“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 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.”

IFC said the investments build on its 55-year engagement in Sri Lanka, including equity participation in Commercial Bank of Ceylon and long-standing partnerships with NDB and NTB. The institution has also recently supported the launch of a Secured Transactions Registry to improve SME access to credit.