The Hon. Nalinda Jayatissa

¶ 01 Hon. Speaker, on behalf of the Minister of Finance, Planning and Economic Development, I table the answer.

¶ 02 - Answer tabled.

¶ 03 (a) (i) Yes. However, instead of collateral-based lending, cash-flow–based lending for MSMEs including young entrepreneurs is already being undertaken, especially by state banks (Bank of Ceylon, People’s Bank). (ii) Two complementary approaches are being pursued: 1. Issue guidance to banks to provide cash-flow–based lending without collateral to young entrepreneurs, consistent with existing banking standards. Directions have been issued to study and implement this. 2. Provide credit guarantees for loans requiring security through the National Credit Guarantee Institution Ltd. (NCGIL). Entrepreneurs lacking adequate collateral can obtain an NCGI guarantee, which banks accept as valid security. A development bank aims to create an enabling financial ecosystem for MSMEs, including promoting cash-flow–based lending. As a long-term process aligned with macroeconomic stabilization, the Government proposes to establish a development bank focusing on MSME formalization, productivity and export promotion. As an initial step, the 2025 Budget proposes to create a new administrative structure within state banks, leveraging NCGI and adopting development-banking practices to improve MSME access to finance, paving the way toward a dedicated MSME Development Bank.

¶ 04 (b) Does not arise.