Access to finance remains one of the biggest barriers preventing Sri Lanka’s small and medium-sized enterprises (SMEs) from expanding and contributing more meaningfully to economic growth. In a bid to address this long-standing challenge, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), together with the Colombo Stock Exchange (CSE), this week launched a new credit assessment framework alongside a broader set of initiatives designed to strengthen financial discipline, governance and investor confidence among SMEs.

The centrepiece of the initiative is the SME Creditworthiness Rating Framework, developed by CA Sri Lanka following a request from the Department of Development Finance of the Ministry of Finance for a standardised and scalable mechanism to assess the creditworthiness of Sri Lankan SMEs. The framework is intended to provide financial institutions with a more consistent basis for evaluating lending risk while helping businesses better understand and improve their financial standing.

Speaking at the launch in Colombo, CA Sri Lanka President Tishan Subasinghe said SMEs are the lifeblood of Sri Lanka’s economy, yet many continue to face difficulties in accessing finance because of the absence of transparent and structured mechanisms to demonstrate their financial credibility. He said the new initiatives are intended to help businesses strengthen their financial credentials, improve access to capital, build investor confidence and develop the governance standards required to progress from privately owned enterprises to publicly listed companies.

The framework comprises two key components, a Creditworthiness Rating System that evaluates businesses based on financial performance, governance and operational indicators, and a set of Application Guidelines outlining eligibility criteria, documentation requirements and the assessment process. Designed to be scalable, the framework is expected to support both micro enterprises and high growth start-ups seeking improved access to financing. Complementing the framework, CA Sri Lanka also introduced the SME Connect Awards, which will recognise enterprises demonstrating strong governance, financial discipline, resilience and sustainable growth.

The Institute believes the awards will encourage higher standards of accountability while showcasing businesses that have successfully adopted sound financial and management practices. Vice President of CA Sri Lanka and Chairperson of the CA SME Connect Committee, Anoji de Silva, said the initiative was developed to bridge a longstanding gap between SMEs and the financial sector by creating a structured pathway towards improved credit access and greater participation in capital markets. She said the objective extends beyond financing, enabling businesses to strengthen financial credibility, scale sustainably and compete more effectively in regional and international markets.

As part of the wider programme, CA Sri Lanka will conduct capacity building workshops to familiarise SMEs with the framework while providing practical guidance on financial management, credit applications and investor readiness. The Institute also launched The Entrepreneur magazine, which will showcase entrepreneurial journeys and provide a platform for greater engagement with Sri Lanka’s SME community. As policymakers continue to place greater emphasis on private sector led growth, initiatives that improve transparency, governance and access to finance are expected to play an increasingly important role in strengthening the country’s SME sector and broadening participation in Sri Lanka’s capital markets.