Local realignments driving global growth: HNB’s vision for a diverse and digitalised SL resurgence

“Growth is never by mere chance; it is the result of forces working together.” – J.C. Penney

Sri Lanka’s recent tentative steps back to growth can be likened to a patient just discharged from hospital after being admitted to intensive care for cardiac arrest. Following a difficult surgery, he is finally on the long road to recovery. Yet, with the immediate danger passed, he is now faced with a hefty bill and some difficult choices to avoid another trip to the ER.

Following historic contractions of 7.3 percent in 2022 and 2.3 percent in 2023, Sri Lanka’s economy was estimated to have achieved between 4.5-5 percent GDP growth in 2024 and is projected to achieve similarly modest growth in 2025. Inflation dropped sharply from 69.8 percent in September 2022 to deflation of 1.7 percent by late 2024, which is expected to revert to modest inflation of 5 percent by the first half of 2025. Meanwhile, negotiations for a US $ 12.5 billion debt restructuring plan have proceeded successfully, potentially saving US $ 9.5 billion in servicing costs over four years.

Despite these promising signs at macro level, at the grassroots, far too many Sri Lankans are still facing the brunt of this crisis, with little to no breathing room. Meanwhile, Sri Lanka’s continuing structural weaknesses taken together with unprecedented global headwinds may mean that the next few decades of our nation’s economic future could primarily be decided by the strategic actions of all stakeholders over the coming months. 

A nation at a turning point

The post-crisis reforms have delivered limited but valuable improvements, underscoring the need for bold policy decisions and robust public-private collaboration. Beyond short-term relief, Sri Lanka must also capitalise on this moment to reimagine how our economy should function in the face of rising global volatility. By directing transparent, strategic investments into infrastructure, human capital, education and technology, the country can create meaningful opportunities for all citizens to prosper in this emerging paradigm.

Yet, revitalising an economy is no simple task. The foundations for long-term prosperity remain precarious and many MSMEs still feel the aftershocks of the pandemic. Without improved capacity at grassroots level—and without a structured pipeline for innovation—it is difficult to translate topline growth into genuine, widespread stability.

In partnership with the government, we believe that the private sector–and the spirit of private enterprise and entrepreneurship–particularly among a new generation of Sri Lankans–still holds the key to this deeper transformation. 

To ensure that we stay out of the emergency room in future, it is also important to re-evaluate the bad habits that brought us to this point and all of the opportunities for healthy growth that we failed to pursue as a result.

More crucially still, we must look to the future. Attraction, retention and expansion of foreign direct investment (FDI) and integration of global best practices, advanced knowledge and technology in every sector of the economy are urgent imperatives. 

These priorities, if addressed with vision and commitment, can propel Sri Lanka into a new era of inclusive prosperity. As a true partner in progress for generations, HNB is aligning its strategies to meet these national objectives, demonstrating how the banking sector can contribute meaningfully to the country’s resurgence.

Inclusive prosperity: Modernising SL’s grassroots 

Beyond the important urgency of immediate policy responses, Sri Lanka has an opportunity to reimagine how its economy is structured and sustained. While easing the burden on the common citizen, we must also drive prudent, transparent and strategic investments into critical infrastructure, human capital, education and technology, in order to build opportunities for all Sri Lankans to once again thrive. 

Based on the experience of HNB on the ground, working with farmers, traders, businessmen and budding entrepreneurs in each of these areas, we have learned that such a bold transformation calls for a renewed and discerning focus on diversification, digitalisation and financial inclusion—and a banking sector that evolves to meet these needs.

HNB’s growth strategy parallels the broader journey that Sri Lanka must now undertake. Our three-pronged approach—organic growth, inorganic expansion and digital transformation seeking a digitalised cashless ecosystem—reflects the broader economic priorities of diversification and tech-enabled growth. The next chapter of Sri Lanka’s growth will be determined by our ability to roll out these capabilities into all sectors of the economy, starting from the bottom up. 

We believe that inclusive growth is the cornerstone of national progress. As one of the first private sector banks to engage with rural Sri Lanka and SMEs from across the island as early as the 1980s with its flagship proposition ‘Gami Pubuduwa’, HNB has always prioritised empowering underserved sectors of the economy. 

Our pioneering ‘barefoot banking’ initiatives harnessed a dedicated team of microfinance officers to engaging directly with Sri Lankans, even in the most remote parts of the island. Working in close contact to understand their individual needs and challenges, our teams continue to offer tailored banking solutions and trusted advice, to help elevate income and drive rural development for generations. 

Through programmes like ‘Gami Pubuduwa’, we delivered structured support – spanning financial literacy and basic business administration training to digital payment acceptance, dedicated export credit facilities and low-cost enterprise resource planning (ERP) systems and e-commerce access – these grassroots entrepreneurs have proved that when Sri Lankan entrepreneurs are given access to the knowledge, capital and tools necessary to succeed in today’s marketplace, they can go the distance. 

By offering tailored financial products and advisory services, we help SMEs transition into bigger, well-structured and more competitive entities. At the same time, our engagement with these growing networks enables digitalisation of SMEs, facilitating banks to gain a deeper understanding of each customer’s pain points and further customise financial products to support their individual journeys. 

Today, this vision continues to evolve through programmes like HNB Sarusara. It was launched with the ambitious goal of accelerating the modernisation of Sri Lankan agriculture and with it, the transformation of our nation’s farmers into dynamic, empowered agripreneurs. Through a series of partnerships, we are educating farmers about the latest best practices in smart farming, while also providing affordable access to technologies that can make an immediate impact on their productivity, efficiency and therefore profitability. 

Building on this momentum, we intend to strengthen our presence across similar farming communities nationwide, with the aim of reaching 30,000 agripreneurs in the year ahead. High-value exports like specialty and value-added tea, spices and other unique homegrown products—including fisheries and novel high-value export items like sea cucumber—present unique advantages in terms of local value addition, yet the sector still lacks sufficient large-scale processors for exporters to truly transform smallholder productivity into export-driven growth.

Our focus on agri modernisation addresses these pain points by helping farmers adopt improved inputs—be it higher-quality seeds or precision equipment—and bridging market gaps through better logistics, financial literacy and direct connections to buyers. Such interventions become especially important when post-harvest losses can reach as high as 35 percent, due to poor storage and transport infrastructure. By leveraging data-driven solutions and collaborating with both government bodies and major corporates, HNB aims to tighten the agricultural value chain from planting to sale.

A cornerstone of this approach lies in tailoring financial services to the needs of each participant along the value chain. For example, large-scale corporates can integrate advanced payment and transaction systems (like HNB’s TXB) into their operations, while small farmers benefit from specialised credit lines and educational programmes that guide them in adopting sustainable practices. Ultimately, this multilayered engagement underscores HNB’s commitment to catalysing an ecosystem where farmers, agribusinesses and exporters can flourish together. 

Beyond SL-Embracing regional opportunities

Sri Lanka’s US $ 80 billion economy must look outward to achieve scale and here too, we are working to ensure that we walk the talk. Just as HNB continues to champion the growth of grassroots communities and modernise agriculture at home, we are also looking outward. 

Our vertically integrated structure, which includes HNB Finance—catering to a different tier of customers—HNB Assurance together with its general insurance solutions and our most recent 100 percent acquisition of our investment bank foraying HNB into fully-fledged integrated banking–including wealth management, equips us to serve the entire spectrum of financial needs under one umbrella in Sri Lanka. This robust ecosystem has consistently allowed us to continuously innovate, whether in rural microfinance or cutting-edge digital platforms. This culture of resilience and adaptability is what sets HNB apart and lends a powerful competitive edge to our total value proposition. 

Today, we stand on the threshold of regional expansion, evaluating potential entry into Bangladesh. Such a diversification into a substantially larger market could offer lucrative new opportunities on a vastly larger scale. It is a journey that began in Sri Lanka’s hill country, empowering local farmers and has evolved into a vision of competing and collaborating beyond our borders. In our view, this same ambition must animate Sri Lankan enterprises of every size. Just as HNB prepares to operate in markets many times bigger than our own, local brands too must explore partnerships, develop export capabilities and embrace global best practices.

By striving beyond our comfort zones and seeking new horizons, we can secure a future where Sri Lanka’s enterprises—agri-based or otherwise—are recognised regionally and globally. In partnership with the policymakers, industry leaders and everyday entrepreneurs, HNB is committed to ensuring a lasting transformation that benefits every corner of our island and extends our footprint across borders.

Source: Daily Mirror