Swedfund Invests $15 million to Expand Access to Capital for MSMEs in Sri Lanka

Swedfund invests USD$15 million in LB Finance to expand financing for micro, small and medium sized enterprises (MSMEs) in Sri Lanka and support lower emissions transport solutions.

The investment is expected to contribute to job creation and long-term private sector development.

Sri Lanka has faced a period of economic challenges following several years of financial instability which have constrained access to financing for businesses and households.

MSMEs represent a significant share of employment and economic activity, yet many businesses still lack access to affordable long-term financing, particularly outside major urban areas.

“Access to finance is critical for MSMEs to invest, grow and create jobs. At a time when long-term funding remains constrained in Sri Lanka, this investment will help increase funding for smaller businesses while also supporting the transition to more sustainable transport. LB Finance’s focus on MSMEs and extensive presence outside Colombo will help reach businesses that are often overlooked by traditional lenders,” says Björn Areskog, investment director at Swedfund.

Swedfund’s investment will enable LB Finance to expand lending to MSMEs across Sri Lanka, including rural businesses and women-led enterprises.

A portion of the financing is made available to loans for electric and hybrid vehicles used by MSMEs, contributing to reduced emissions and more sustainable transport solutions.

Swedfund will also support LB Finance in strengthening its environmental and social risk management systems and climate related lending practices.

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