- Industry-linked financing initiative targets renewal of ageing tea fields, improve productivity and empower tea smallholders
Commercial Bank of Ceylon has introduced a dedicated loan scheme to revitalise Sri Lanka’s tea industry, demonstrating its strategic initiatives designed to penetrate the small and medium enterprise sector and rural micro-economy and catalyse sustainable growth across the national tea industry.
The new loan scheme enables the tea smallholders to invest in the renewal of ageing tea fields, improve cultivation practices and strengthen the productivity and sustainability of one of the country’s most important export sectors.
The Revitalising the Sri Lankan Tea Sector loan scheme, developed in collaboration with the Sri Lanka Tea Factory Owners Association (SLTFOA) and participating tea factories, seeks to address a critical constraint facing the industry: limited access to affordable financing for the long-term investments needed to sustain the tea production and improve farmer incomes. Sri Lanka’s tea industry generated approximately US $ 1.51 billion in export revenue in 2025 and supports more than 400,000 tea smallholder families, contributing to the livelihoods of nearly 1.5 million people across the rural communities. Yet, despite the global reputation of Ceylon Tea, the sector faces challenges including the declining national production, ageing tea bushes, inadequate replanting, soil degradation and the financial constraints that prevent many farmers from investing in more productive cultivation.
The tea smallholders account for more than 70 percent of national tea production, making their capacity to maintain and improve their lands central to the future of the industry. By directing financing towards essential cultivation improvements, Commercial Bank said this timely initiative aims to help address these challenges while safeguarding the rural communities whose livelihoods depend on tea.
The scheme’s distinguishing feature is its industry-linked financing model, which brings together the bank’s financial expertise, SLTFOA’s industry network and tea factories maintained by the tea smallholders.
Moving beyond the standard banking services, this collaborative approach is designed to connect the eligible farmers with the funding they need to renew their tea lands and improve productivity.
The financing is available for replanting and infilling, soil rehabilitation, land preparation, purchase of certified planting material and agricultural inputs, nursery establishment, mechanisation, modern agricultural practices and irrigation systems. These investments are intended to help the farmers replace the ageing bushes, fill vacant spaces in the existing fields and make more productive use of their tea-growing land.
Under the scheme, the eligible tea smallholders can obtain loans of up to Rs.1 million per acre for replanting and infilling or up to Rs.1.5 million per acre for replanting and infilling with an irrigation system.
The loan scheme has been designed with tailor-made features to support tea cultivation projects. The repayments will be made through deductions linked to green-leaf deliveries to factories, with a corporate guarantee from the tea factory serving as security.
The eligible applicants must be registered tea smallholders supplying green leaf to recognised tea factories that are members of the SLTFOA. The applicants must also meet the bank’s lending and repayment-capacity requirements. Priority would be given to the farmers with aged tea bushes, low-productivity holdings and those undertaking replanting or rehabilitation, while female participation would be encouraged, the bank said. Commercial Bank’s initiative reflects its recognition that the long-term health of the tea industry is closely linked to the economic resilience of rural Sri Lanka. By helping the tea smallholders overcome the financial barriers to essential cultivation investments, the scheme seeks to support stronger productive capacity, more sustainable farming operations and improved income-generating potential.
