The International Finance Corporation (IFC), part of the World Bank Group, has announced a $166 million investment programme aimed at supporting Sri Lankan businesses and helping the country move from economic stabilisation towards longer-term growth.

The funding package is designed to expand access to finance for small and medium-sized enterprises (SMEs), with a particular focus on women-owned businesses and the agri-business sector. IFC said the initiative is intended to promote inclusive growth and create employment opportunities in key parts of the economy.

The investment will be channelled through three of Sri Lanka’s largest private commercial banks, such as the 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 make up more than 75 percent of businesses in Sri Lanka and account for around 45 percent of total employment. However, limited access to credit has continued to restrict their ability to grow. IFC said the programme aligns with both World Bank Group priorities and national development goals, aiming to improve access to finance while supporting economic resilience.

“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.

The $50 million loan to NTB marks the first IFC-funded debt investment in Sri Lanka’s financial sector since the 2022 economic crisis. Of this amount, $7.5 million, representing 15 percent of the total, has been allocated specifically for on-lending to women-owned SMEs.

In addition, IFC has partnered with CBC and NDB to establish up to $80 million in Risk-Sharing Facilities. The facilities include $60 million for CBC and $20 million for NDB, under which IFC will cover 50 percent of principal losses on a portfolio of eligible SME loans. IFC said the arrangement is intended to encourage increased lending to SMEs, including women-owned enterprises and agri-businesses.

The RSFs are supported by the IDA Private Sector Window Blended Finance Facility through the Small Loan Guarantee Program (SLGP), which is designed to reduce risk and expand financing for SMEs in eligible countries, including Sri Lanka.

IFC will also provide $36 million in guarantees through its Global Trade Finance Program (GTFP) to strengthen trade finance operations at NTB and NDB. The trade finance facilities include up to $20 million for NTB and $16 million for NDB, supporting access to global markets and supply chains for underserved sectors.

“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.

Beyond financing, IFC will also provide technical support to NDB to upgrade its digital transaction banking and supply chain finance systems. The advisory work is expected to improve access to credit for underserved SMEs and includes enhancements to NDB’s climate risk management framework, integrating climate considerations into the bank’s strategy and operations.

The announcement comes as Sri Lanka continues to recover from a series of economic and environmental challenges.

“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 investment builds on its 55-year presence in Sri Lanka. The organisation is a long-term partner and shareholder in several leading financial institutions, including an equity stake in CBC and long-standing relationships with NDB and NTB.

More recently, IFC supported improvements to Sri Lanka’s financial infrastructure through the launch of a Secured Transactions Registry (STR), aimed at increasing credit access for SMEs.