Vehicle Loans Are Now 65% of Finance Company Lending — Too Concentrated to Be Safe?

Sri Lanka's central bank says vehicle and gold-backed loans now make up almost 25% of all bank and finance company lending, up from under 20% two years ago. At finance companies alone, vehicle financing is about 65% of their loan book, against less than 5% at banks — a handful of institutions are almost entirely betting on car and bike values holding up. The regulator has already cut maximum loan-to-value limits twice in the last year, worried that a drop in used vehicle prices could wipe out collateral cover overnight. One side says this is just how ordinary Sri Lankans access credit when salaries don't qualify for unsecured loans — a lender that won't accept your vehicle as security locks out working people entirely. The other side says finance companies are stacking risk on one volatile asset class, and when import taxes change or prices swing, borrowers and lenders get hurt together. Have you taken a vehicle-backed loan, and did the LTV cuts change what you could borrow? Is this normal lending in an economy with few other collateral options, or are finance companies dangerously overexposed? ලීසිං සමාගම් දැන් මූලික වශයෙන් වාහන වලට පමණක් රැඳී සිටිනවා — ඔබ සිතනවාද මෙය අනාරක්ෂිතද?