The National Credit Guarantee Institution Limited (NCGIL) is set to transform the landscape for Sri Lanka’s micro, small, and medium enterprises (MSMEs), offering much-needed support to fuel entrepreneurship and economic growth.
“NCGI is ready to serve Sri Lanka’s small businesses,” said Jude Fernando, Chief Executive Officer of NCGIL, in an exclusive interview with Finance Today. “We understand that accessing finance can be a significant hurdle, especially when starting out or looking to expand. Our credit guarantee schemes are designed to bridge that gap — providing financial institutions with the confidence to invest in your vision, even if you lack traditional collateral.”
Fernando encouraged entrepreneurs to reach out to NCGIL’s partner banks and financial institutions. “With NCGI’s support, viable business ideas can gain the financial backing needed to become a reality, create jobs, and contribute to the prosperity of our nation. We are committed to fostering a supportive ecosystem where your entrepreneurial spirit can flourish.”
Expanding Support for MSMEs
NCGIL, a public-private partnership incorporated under the Companies Act No. 7 of 2007, has commenced operations with a clear focus: providing partial credit guarantees to its 13 shareholder financial institutions (SFIs). This enables SFIs to lend confidently to MSMEs based on project viability and cash flows, rather than traditional collateral.
Since launching in January, NCGIL has already issued guarantees to three financial institutions, supporting loans for three MSMEs. Through its Individual Guarantee Scheme, NCGIL guarantees up to 67% of approved loan amounts, de-risking lending and making credit more accessible for entrepreneurs who lack the fixed assets required by conventional lenders.
New Initiatives on the Horizon
Looking ahead, NCGIL plans to introduce several new initiatives over the next 12 to 18 months. These include:
- Non-Financial Support Programmes: In collaboration with partner organisations, NCGIL will offer training and advisory services in financial management, business planning, and marketing.
- Expanded Partnerships: Efforts are underway to broaden the network of partner banks and financial institutions, improving access nationwide.
- Targeted Guarantee Products: Upcoming products will focus on gender-inclusive financing and climate-friendly business initiatives, reinforcing NCGIL’s commitment to priority sectors and inclusive growth.
Addressing Key Challenges
Small businesses in Sri Lanka often struggle with limited access to finance due to insufficient collateral and gaps in financial literacy. “Many financial institutions view lending to MSMEs as high-risk due to their size and market sensitivity,” Fernando explained. “NCGI’s credit guarantees directly address the collateral challenge by reducing lenders’ exposure. At the same time, we are committed to helping MSMEs enhance their financial management skills.”
Flexible and Inclusive Lending
NCGIL’s guarantee scheme covers term loans from LKR 500,000 up to LKR 25 million, with flexible tenors of up to 10 years for capital expenditure and up to 3 years for working capital. The priority sectors include women-owned or managed businesses, environmentally friendly ventures, tourism, agriculture, IT services, and exports.
Key Features at a Glance
| Feature | Details |
|---|---|
| Guarantee Coverage | Up to 67% of loan amount |
| Eligible Business Sectors | Agriculture, Industry, Services |
| Loan Amount Range | LKR 500,000 – LKR 25 Million |
| Tenor | Capex: 1–10 Years; Working Capital: 1–3 Years |
| Guarantee Fee | 1%–2% per annum on guaranteed amount |
| Priority Sectors | Women-led, Green Businesses, Tourism, IT, Export |
Driving Economic Development
By reducing risk for lenders and equipping entrepreneurs with both funding and practical skills, NCGIL is helping unlock business growth, drive job creation, and build a more inclusive and resilient economy.
“Through our expanding initiatives and targeted guarantee schemes, we are not only improving access to finance but laying the foundation for sustainable entrepreneurial development in Sri Lanka,” Fernando concluded.
Contact:
National Credit Guarantee Institution Limited
The Secretariat, Room 321, 3rd Floor
Colombo 01, Sri Lanka
Phone: +94 705 777 805
Email: [email protected]
