DFCC Bank recently hosted the 49th Annual Meetings of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) from September 23 to 25, 2026, at Cinnamon Life in Colombo, Sri Lanka. This event brought together regional leaders to explore how patient capital, private investments, and enhanced partnerships can foster economic stability and drive productive growth.
After several years of working towards economic stabilization, Sri Lanka now faces the challenge of capitalizing on this newfound stability. This theme was central to discussions at the ADFIAP meetings, held under the title “Partnerships for Prosperity: Unlocking Regional Potential.” Participants included development finance institutions, policymakers, bankers, and leaders from the private sector, all focusing on the next steps for regional advancement.
The conversations evolved beyond mere economic recovery to address strategies for attracting productive investments, mobilizing private capital, and financing both businesses and infrastructure, which may take time to yield significant returns.
In his keynote speech, Dr. Nandalal Weerasinghe, the Governor of the Central Bank of Sri Lanka, highlighted that the recent upgrade of Sri Lanka’s sovereign ratings signifies the progress made in stabilizing and reforming the macroeconomic landscape. However, he emphasized that achieving investment, productivity, and sustained growth is the next critical goal. Development finance institutions must expand their roles beyond traditional lending to make projects more appealing to investors, share risks with conventional lenders, and unite public, private, and multilateral funding sources.
The importance of partnerships was underscored in this context, as they serve to diversify the capital available for development and direct it toward initiatives that can generate long-term economic value.
During the opening Special Interest Session titled “Sri Lanka’s Financial Landscape: Transforming Challenges into Regional Opportunities,” Thimal Perera, the Director and CEO of DFCC Bank, emphasized that traditional bank lending is not a panacea for all developmental challenges. He noted that some businesses require time to generate sufficient cash flow to manage debt, while others need capital for growth, technological adoption, or market expansion. Early imposition of conventional loans can hinder their potential.
Alternatives such as patient capital, minority equity, quasi-equity, and suitable risk-sharing frameworks may offer more effective solutions. Development financiers can also play a role in governance by participating on boards to enhance financial discipline and oversight during the establishment phase of businesses.
DFCC Bank’s historical roots as Sri Lanka’s first development finance institution have informed its current practices, which blend long-term lending with equity participation and active engagement with funded businesses. The emphasis is not on reverting to past models but rather embracing an approach that tailors development finance to meet the specific needs of enterprises and the desired economic outcomes.
Effective development finance institutions create the most value by facilitating the entry of other capital into investment opportunities. This might involve blended finance mechanisms, guarantees, co-lending arrangements, first-loss structures, or providing technical assistance to meet commercial investor standards. Rather than competing with private capital, the goal is to help it access areas that might otherwise be viewed as too risky or large.
The discussions also acknowledged the limitations of a financing system heavily reliant on commercial bank lending, which is typically constrained by risk and maturity limits. Emerging businesses, large-scale infrastructure projects, and innovations in climate technology often require different types of financial support.
Sri Lanka faces a broader challenge: how to create deeper investment channels for promising enterprises when the required funding is too substantial for informal investors yet too uncertain for traditional lenders. Solutions will necessitate collaboration among various financial system components, including banks, development finance institutions, pension and insurance funds, capital markets, private equity, and international partners.
The ADFIAP meetings resulted in the signing of six partnership agreements aimed at advancing the regional development agenda, covering areas such as green infrastructure, sustainable finance, agricultural technology, digital banking, capacity building, and the establishment of a regional financial technology ecosystem.
Key partnerships were formed with organizations such as the China City Development Fund and auctusESG, focusing on green industry and sustainable finance. Another agreement with TRACEE aims to enhance agricultural finance and supply-chain connectivity, while collaborations with Synapsys Ltd PLC and MGI Consultancy LLC address the development of financial technology infrastructure and digital finance frameworks, respectively.
The sessions explored how these capabilities could be leveraged across various regional priorities, including public-private partnerships, regional integration, climate finance, and social inclusion. These interconnected discussions highlighted that a small business cannot fully utilize digital finance without adequate connectivity, and renewable energy projects require long-term capital to proceed.
In his opening remarks, H.E. Dr. Kao Thach, ADFIAP Chair and CEO of Cambodia’s Agricultural and Rural Development Bank, urged development finance institutions to redefine success based on their contributions to long-term national and regional productivity. This perspective emphasizes that merely measuring loan volumes or transaction counts does not adequately reflect the creation of stronger businesses or improved job opportunities.
As a founding member of ADFIAP, DFCC Bank’s role in hosting the Annual Meetings for a third time brought the focus back to the nation where its development finance journey began. The meetings fostered an environment for policymakers, financiers, and practitioners to exchange insights, challenge existing practices, and identify cooperative opportunities.
While no single institution or financial product can resolve the region’s development challenges, the meetings provided a clearer understanding of the path forward. Sri Lanka’s restored stability offers a foundation, but the future hinges on transforming confidence into investment and investment into productive capacity. Development finance can bridge this gap, requiring institutions to be adaptable in lending, investing, and sharing risks while also engaging others in significant opportunities that should not remain unfunded.
