The volume of bank loans granted against gold collateral rose sharply during the first half of 2026, with the outstanding value of such loans increasing by Rs. 211.9 billion, according to Central Bank of Sri Lanka data.
Between the end of December 2025 and the end of June 2026, gold-backed lending increased by 23.6%, bringing the total outstanding value of pawning loans to Rs. 1.11 trillion.
This was the second-highest growth recorded among individual lending sub-sectors during the period, following lending to the financial and business services sector.
Registered commercial banks increased lending to the financial and business services sector by Rs. 212.7 billion, or 27.1%, bringing total outstanding credit in that sector to Rs. 996.8 billion.
Central Bank data shows that banks provided Rs. 1.14 trillion in new credit to the private sector during the first six months of 2026, with pawning advances accounting for 18.6% of the total increase.
The sharp rise in gold-backed lending also accounted for a significant share of the expansion in personal credit. Pawning advances contributed nearly half of the Rs. 443.5 billion increase in personal credit during the period.
By comparison, new credit extended to the agriculture and fisheries sectors amounted to Rs. 86.6 billion, meaning the growth in pawning advances was more than twice the amount of new credit provided to those sectors.
The share of pawning loans in the overall banking loan portfolio also increased from 8.9% at the end of December 2025 to 9.9% by the end of June 2026. The value of pawning loans had already exceeded Rs. 1 trillion by March.
With outstanding loans of Rs. 1.11 trillion, pawning has now become the third-largest lending sub-sector, behind construction, including housing, at Rs. 1.91 trillion, and wholesale and retail trade at Rs. 1.13 trillion.
