Finance Companies’ Borrowings Surge Past Rs.1 Trillion as Lending Accelerates

Sri Lanka’s licensed finance companies have more than doubled their borrowings to over Rs.1 trillion as they ramp up lending, with total assets rising 41% year-on-year to Rs.3.2 trillion by June 2026. Borrowings increased 124% to Rs.1.05 trillion, while the sector’s loan book expanded 47.8% to Rs.2.6 trillion, driven largely by vehicle financing, leasing, hire purchase, gold loans and pawning. However, rising credit-risk indicators, higher funding costs and increased gearing point to growing pressure on the sector’s asset quality and profitability.