Nat’l Export Develop. Plan 2035: SME export contribution to increase by 3x

Sri Lankan Small and Medium enterprises (SMEs) are to increase sector contribution to export earnings by threefold in less than a decade’s time, Export Development Board Chairperson Mangala Wijesinghe said during a press briefing held on Monday (26).

“Especially if you take Sri Lankan SMEs, they contribute more than 52% to national growth, but their contribution to exports is only around 8%. One of our expectations for 2035 is to enable SME contribution to the export sector to reach 25%,” Wijesinghe said.

He further added that the foundational steps for this were taken last year (2025), noting the stakeholder consultations the agency had partaken in, in preparation of the National Export Development Plan (NEDP), with the technical assistance of the Asian Development Bank.

Wijesinghe expressed that the EDB had also engaged with global development institutions such as the International Finance Corporation (IFC), the International Trade Centre (ITC), and the Import Promotion Desk (IPD), in its bid to support SMEs.

On Monday, World Bank Group member IFC pledged loans and credit guarantees worth $ 166 million to three local commercial banks: Nations Trust Bank, Commercial Bank of Ceylon and National Development Bank, with a focus on supporting SMEs. The package comprised around $ 50 million in loans, $ 80 million in risk-sharing facilities, and $ 36 million in trade finance support.

“While SMEs account for over 75% of all Sri Lankan businesses and 45% of jobs, access to credit remains a significant barrier to their expansion. 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,” the statement released by the development institution said.

Central Bank data on SME lending rates between 2024 and Q4 of 2025 show that rates have remained persistently high between 11.38-11.46%. Despite CBSL making a 25 bps monetary policy rate cut in May 2025, the lending rate saw an increase of 8 basis points within the year.

Additionally, in the wake of Cyclone Ditwah, the national registry for affected businesses recorded that of the 29,649 businesses that had been registered, 12,300 were micro enterprises, 9,844 were small enterprises, and 6,644 were medium enterprises. Approximately 685 export-oriented businesses were reported to have sustained damages.

Though there is no granular data on the number of affected exporting Micro, Small and Medium Enterprises (MSMEs) available, it is typical for MSMEs to operate as indirect exporters; selling products to domestic companies that resell products in foreign markets, making the estimate of impacted MSMEs much higher than expected.

The Sri Lankan Government allocated MSMEs Rs. 95 billion this year for subsidised loans, with the intention of aiding expansion of businesses. MSMEs were provided a loan subsidy of Rs. 200,000, in the wake of the impact of the cyclone, at an interest rate of 3%, with micro-entrepreneurs eligible for up to Rs. 250,000, small-medium-scale entrepreneurs offered up to Rs. 1 million, while medium/large-scale entrepreneurs were offered up to Rs. 25 million.

Yesterday (27), 13 more local banks, some of which were private banks, expressed their willingness to offer capital loans to enable restarting of MSMEs that had been impacted by Cyclone Ditwah. Since December of 2025, three State banks had been offering the aforementioned loan facilities to MSMEs.

Accordingly, the Finance, Planning and Economic Development Ministry is to facilitate these funds for MSMEs at a 3% interest rate for loans of up to Rs. 25 million.

Source - The Morning