Business · Sri Lanka Bureau
Audit reveals Rs. 97m in tea nursery loan benefits lost to inactivity
The National Audit Office has uncovered significant wastage in a government-backed tea nursery scheme, with nearly half of participating operators becoming inactive within years of receiving loans and material support.
LSN Sri Lanka ·
Financial and material benefits totalling Rs. 97,673,635 have been squandered under a special tea nursery development project, according to findings released by the National Audit Office. The investigation revealed that 535 of 980 loan recipients who were provided financing to establish tea nurseries had ceased operations by 2025, rendering their allocated resources unproductive.
The scheme was designed to boost tea sector productivity by supplying nursery operators with loans and supporting materials as part of a broader agricultural development initiative. However, the high rate of operator inactivity—representing approximately 54 percent of participants—has raised questions about project implementation, borrower viability assessments, and oversight mechanisms.
The audit findings underscore concerns about resource management in agricultural lending programmes and suggest that monitoring systems may have failed to identify or address deteriorating conditions among participating nurseries. Officials have not yet issued statements regarding corrective measures or recovery procedures related to the inactive operations.
The wastage represents a substantial loss to public funds allocated for tea sector development, a significant contributor to Sri Lanka's export economy. The National Audit Office report is likely to prompt scrutiny of similar agricultural credit schemes currently in operation across the country.