The Department of Development Finance reports that over Rs. 75 billion of a Rs. 95 billion MSME support package has been distributed to nearly 7,000 beneficiaries across multiple loan schemes.
The government's initiative to support micro, small and medium-sized enterprises has progressed substantially, with the Department of Development Finance confirming that more than 80% of the Rs. 95 billion allocation from the 2026 Budget has already been disbursed. According to the Department, approximately Rs. 75 billion in loans had reached beneficiaries by the early stages of the third quarter, with 6,832 entrepreneurs receiving financing through five distinct loan programs implemented in partnership with 15 state and private banks.
The MSME support framework incorporates specific equity requirements, with the government mandating that at least 20% of loans be allocated to women entrepreneurs and another 20% to young entrepreneurs. Of the total allocation, Rs. 55 billion was designated specifically for small and medium-sized enterprises. The Department emphasized that the concessionary financing is designed to enable businesses to survive, recover and expand within the current economic environment.
Beyond standard lending, the government has established specialized programs targeting enterprises affected by Cyclone Ditwah and recent economic difficulties. A dedicated disaster loan scheme offers working-capital loans up to Rs. 25 million at 3% annual interest, with approximately Rs. 8 billion of the Rs. 10 billion allocated having been distributed to 3,966 affected entrepreneurs by late July 2026. The Department noted that over 90% of these beneficiaries operate as micro or small-scale businesses. Additionally, the government has supported 342 MSMEs through debt restructuring arrangements that enabled their resumption of operations.
A collateral-free lending program has issued guarantees totaling approximately Rs. 9.65 billion for 2,143 loans with a combined value of nearly Rs. 14 billion, extending across all districts of Sri Lanka. The Department also reported that 70 businesses in the non-performing loan category received Rs. 235 million in working-capital support despite their inability to access conventional financing.
