• Loans offered at 3% annum interest 

Sri Lanka is to introduce loan schemes for Micro, Small and Medium Enterprises, between Rs. 250,000 and Rs. 1,000,000 for a period of three years, at a 3% interest rate, in an effort to rebuild businesses within the segment that have been affected by adverse effects of cyclone Ditwah, a Cabinet decision released yesterday (11) by the Government said.  

“Under the proposed scheme, it is expected to take measures to provide required funds for a period of 03 years under an interest rate of 3% per annum,” the decision said.

It further added that the maximum concessionary period is to be 6 months, with micro enterprises eligible for a maximum of Rs. 250,000 and SMEs Rs. 1,000,000. Accordingly, the decision stated that upwards of 130,000 entrepreneurs were to receive short and medium term financial concessions.

This loan framework is to be called: RE-MSME – Disaster Relief, which is to be consolidated with the loan scheme SMILE – III, meant for industrial and production sector investments, E – FRIEND – II, meant for environmental friendly financing, all under the RE-MSME PLUS programme, which is to take effect from 2026.

Though timely data on Sri Lanka’s number of operating MSME’s is unavailable, in 2018 Sri Lanka had roughly between 1.3 million active MSMEs, of which 79.8% remained active by 2023, according to a Impact of the economic crisis on MSMEs in Sri Lanka report produced by the Department of Census and Statistics (DCS) in 2024.

For Sri Lanka, MSME’s contribute more than 50% of the country’s GDP, DCS data shows. Due to the economic volatility experienced in the past five years, Sri Lanka’s MSME debt burden is to surpass Rs.1 trillion in the near future.