The government will expand its collateral-free loan programme to 3,000 entrepreneurs by year-end

The Government will expand its collateral-free loan programme to 3,000 entrepreneurs by the end of the year, the Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe has said.

The National Credit Guarantee Institution (NCGI), which facilitates this programme, has expanded its service by opening a new operations centre at the HNB Tower in Colombo, the Deputy Minister said in social media post.

This expansion aims to extend vital financial facilities to an additional 1,000 local entrepreneurs, in addition to the 2,000 who have already been supported through the programme before the end of the year, the Deputy Minister said.

Context

Over the past 15 months, the NCGI has successfully facilitated more than 14 billion rupees across 2,000 collateral-free loans.

The landmark 2,000th guarantee was recently granted to a kithul products entrepreneur operating through Commercial Bank.

The initiative was specifically designed to support talented individuals whose business dreams were previously stalled due to a lack of traditional collateral.

Future Framework

To qualify for the facility, businesses must demonstrate organized operations, strong cash flow, practical forecasts, and obtain their bank's consent.

The state aims to further support industries by establishing a microfinance loan system, cooperative banking, a development bank, and an ownership capital fund.

“Because of a lack of collateral, many capable entrepreneurs’ dreams were stalled. It is to give life to those dreams that we introduced this credit guarantee system. Now, instead of collateral, the government intervenes to provide you with a guarantee,” the Deputy Minister said in his social media post.