The Commercial Bank of Ceylon has launched a dedicated loan scheme to help tea smallholders renew ageing plantations, improve productivity and strengthen the long-term sustainability of Sri Lanka’s tea industry.

The “Revitalizing the Sri Lankan Tea Sector” scheme, developed in collaboration with the Sri Lanka Tea Factory Owners Association (SLTFOA) and participating tea factories, aims to address financing constraints that have hindered investment in replanting and improving tea lands.

Eligible smallholders can obtain loans of up to Rs. 1 million per acre for replanting and infilling, rising to Rs. 1.5 million per acre when an irrigation system is included.

The financing covers a range of cultivation investments, including land preparation, soil rehabilitation, certified planting material, agricultural inputs, nursery establishment, mechanisation, modern farming practices and irrigation systems.

A key feature of the scheme is its industry-linked repayment mechanism. Loan repayments will be deducted from proceeds earned through green-leaf deliveries to participating factories, while a corporate guarantee from the relevant tea factory will serve as security.

Applicants must be registered tea smallholders supplying green leaf to recognised tea factories that are members of the SLTFOA, and must satisfy the Bank’s lending and repayment-capacity requirements.

Priority will be given to farmers with ageing tea bushes, low-productivity holdings and those undertaking replanting or rehabilitation. The Bank will also encourage greater participation by women.

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, providing livelihoods for nearly 1.5 million people. Smallholders account for more than 70% of national tea production.

However, the industry faces challenges including declining production, ageing tea bushes, inadequate replanting, soil degradation and limited access to financing for long-term cultivation improvements.

Commercial Bank said the initiative reflects its strategy to expand support for the small and medium-sized enterprise sector and the rural economy, while helping address structural challenges affecting tea production.

By facilitating investment in plantation renewal and improved cultivation practices, the scheme is intended to strengthen smallholder productivity and incomes while supporting the international competitiveness of Ceylon Tea.

Commercial Bank, one of Sri Lanka’s largest private sector lenders, operates more than 270 branches and an extensive islandwide automated banking network. It also has an international presence spanning Bangladesh, the Maldives, Myanmar and the Dubai International Financial Centre.