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Krishani
Krishani
Sep 29 2026
37Bank lending against gold grew by more than Rs. 200 billion in the first six months of 2026. That was the second-largest increase of any sub-sector, only just behind financial and business services, Central Bank of Sri Lanka (CBSL) data showed.
Pawning loans rose Rs. 211.9 billion, or 23.6%, in the first half of 2026, from end-December 2025 to end-June, to Rs. 1.11 trillion. Lending by Licensed Commercial Banks (LCBs) to financial and business services rose Rs. 212.7 billion, or 27.1%, to Rs. 996.8 billion, just Rs. 0.8 billion more.
Pawning took 18.6% of the Rs. 1.14 trillion in new credit to the private sector in 1H. It accounted for nearly half of the Rs. 443.5 billion increase in personal loans, and was more than twice the Rs. 86.6 billion in new lending to agriculture and fishing. Its share of total bank loans rose to 9.9% from 8.9% at end-December 2025, after it crossed Rs. 1 trillion in March.
It is now the third-largest sub-sector, behind construction at Rs. 1.91 trillion and wholesale and retail trade at Rs. 1.13 trillion.
Because pawning loans are fully secured against gold, they carry lower risk for banks. However, the amount that can be borrowed rises and falls with the price of gold.
Together, pawning and financial and business services accounted for Rs. 424.6 billion, or 37%, of new credit in 1H. That was more than the Rs. 358 billion lent to the whole services sector, and more than the Rs. 335.5 billion lent to industry and agriculture combined.
The figures show that bank credit growth in 1H came mainly from households and financial firms, not from businesses outside the financial sector. Personal loans and lending to financial and business services together took 58% of new credit. Non-financial businesses in agriculture, industry, and services took 39%.
Financial and business services’ share of total loans rose to 8.9% from 7.8%, with Rs. 65.7 billion of its 1H gain coming in June alone. The CBSL does not break down lending within this category, which can include loans to finance and leasing companies that lend the funds on.
Personal loans and advances, which exclude housing loans, rose Rs. 443.5 billion, or 20%, to Rs. 2.67 trillion. That was 39% of all new credit in 1H, and their share of total loans rose to 23.8% from 22.1%.
Loans for consumer durables rose Rs. 53.5 billion, or 66.2%, to Rs. 134.2 billion, which shows households financing more purchases of durable goods through bank credit.
Their share of total loans rose to 1.2% from 0.8%. Other personal loans grew Rs. 136.9 billion, or 14.2%, to Rs. 1.1 trillion. Credit card balances rose Rs. 13.3 billion, or 6.9%, to Rs. 206.6 billion, though their share slipped to 1.8% from 1.9%.
The Rs. 443.5 billion increase in personal loans matched the Rs. 444 billion increase in lending to non-financial businesses. In other words, households took on as much new bank debt, excluding housing loans, as all businesses outside the financial sector combined. The share of non-financial businesses in total loans fell to 58.2% from 60.4% at end-December 2025.
Industry remains the largest borrowing sector but grew slowest in 1H. Its lending rose Rs. 248.9 billion, or 6.5%, to Rs. 4.08 trillion, and its share fell to 36.4% from 38%.
Construction added Rs. 85.4 billion, or 4.7%, to Rs. 1.91 trillion, and its share fell to 17.1% from 18.1%. Personal housing loans, which the CBSL counts under construction, rose Rs. 35.5 billion, or 3.9%, to Rs. 938.3 billion.
Their share fell to 8.4% from 9%. Textiles and apparel added Rs. 20.9 billion, or 5.1%, to Rs. 427.6 billion, and its share fell to 3.8% from 4%.
Chemical, petroleum, pharmaceutical, healthcare, rubber, and plastic products was one of the few manufacturing categories to gain share. Its lending rose Rs. 42.8 billion, or 18.9%, to Rs. 269.1 billion, and its share rose to 2.4% from 2.2%. Food and beverages grew Rs. 26.7 billion, or 10.9%, to Rs. 270.4 billion. Basic metal products rose 12.2% to Rs. 86.1 billion.
Credit to fabricated metal products, machinery, and transport equipment fell Rs. 21.8 billion, or 6.8%, to Rs. 299.3 billion. Almost all of the fall came in June, when lending dropped Rs. 22.2 billion, and the category’s share fell to 2.7% from 3.2%.
Lending to construction and to machinery and transport equipment, which pays for buildings and equipment, grew slowly or fell. So far, that shows little sign of a broad pickup in business investment financed by banks.
Services lending as a whole rose Rs. 358 billion, or 11.5%, to Rs. 3.47 trillion. Its share held steady at 30.9%, but almost 60% of the increase went to financial and business services. Wholesale and retail trade added Rs. 35.3 billion, growth of just 3.2%, to Rs. 1.13 trillion, and its share fell to 10.1% from 10.8%.
Tourism credit rose Rs. 40.1 billion, or 14.1%, to Rs. 325 billion. Lending to shipping, aviation, and freight forwarding rose 33.6% to Rs. 51.5 billion, and communication and information technology rose 5.6% to Rs. 144.5 billion.
Agriculture and fishing credit rose Rs. 86.6 billion, or 9.5%, crossing Rs. 1 trillion in June. Its share was broadly steady at 9%. Paddy lending rose Rs. 20.5 billion, or 27.2%, to Rs. 95.8 billion. Livestock and dairy farming rose Rs. 17.8 billion, or 23.7%, to Rs. 92.7 billion. Tea, the largest farm sub-sector, grew Rs. 15.6 billion, or 8%, to Rs. 209.8 billion.
Year-on-year, the shift is starker. Pawning rose Rs. 381.4 billion, or 52.4%, from end-June 2025, and its share of total loans rose to 9.9% from 8.3%. Lending to financial and business services rose Rs. 464.1 billion, or 87.1%, and its share rose to 8.9% from 6.1%.
Personal loans grew 39.8%, the fastest of the four main sectors, while industry grew 19.2% and its share fell from 39%. Non-financial businesses’ share fell four percentage points from 62.2%. Consumer durables loans more than doubled. Communication and information technology was 14.5% lower than a year earlier, and shipping, aviation, and freight forwarding 10% lower.
The CBSL started the monthly sectoral survey in April 2025, replacing a quarterly survey. It warns that some sub-sector growth during the switchover partly reflects reclassifications by individual banks. The survey covers LCBs only and does not include finance companies. June 2026 figures are provisional.
