The trauma of war, a boom and bust economy and asset bubbles were a feature of CDB’s adolescence from 2004 onwards. Despite the volatility, CDB, a non-bank financial institution (NBFI), consistently out performed the industry ironically, while failing to meet its own growth goals.
“Companies despise red ink on budget outturns,” suggests Damith Tennakoon, CDB’s Deputy Chief Executive Officer. “For us to achieve Rs90 million on a Rs100 million goal is better than setting a Rs70 million target and achieving Rs75 million. That’s the mindset we’ve created: to be ambitious.”
Wild ambition straddles the dubious. Tennakoon accepts it risks an incredulous reception or worse, people ignoring the goal altogether. But that’s never the case at CDB, recalls Tennakoon, who was leading CDB’s finance function at the time. “Branch staff, managers, the support teams; everyone really, sets their own ambitious targets. They aren’t waiting for directives from the top.”
CDB’s annual budget and goals are shared with the team. As a result, it serves to reinforce the commitment and performance of the team.
The balance sheet size surged in the decade to March 2025, with assets topping Rs156 billion. For comparison, CDB’s balance sheet had just crossed the Rs50 billion mark only in the financial year 2015. During that decade, CDB achieved a 15% compound annual growth rate (CAGR) compared to the NBFI sector’s 10% CAGR in the same period.
CDB’s share of NBFI assets increased by 50% in the decade. (Graph 1)
Its lending topped Rs110 billion in the financial year ending March 2025, a 29% year-on-year increase.
In the early 2000s, the company now known as Citizens Development Business Finance PLC (CDB) was on life support. Founded in 1995, it had limited capital and modest resources. The early years were difficult. From 1996 to 2000, losses mounted as the loan book deteriorated, operational costs stayed high, and competition intensified.
Under the circumstances few could have predicted that the same institution would go on to become Sri Lanka’s 4th largest non-banking financial institution (NBFI) by assets in three decades.
By 2001 CDB’s balance sheet was in critical shape. During this time, the firm consistently reported losses, and its non-per forming loans were rising.
Fortunately for CDB, their leadership team was about to see certain changes, forming the foundation that would eventually push the company’s fortunes in a positive direction. A fresh leadership bench emerged around this time, which set the foundations for CDB’s turnaround.
Mahesh Nanayakkara had joined the company in 2001, and was later appointed as its Managing Director and Chief Executive Officer in 2004, amid this uncertainty. “I always wanted to be a CEO,” he would later say, “but never imagined becoming the CEO of a company with a negative net worth.” His first meeting in the role took place around a cluttered table, in a room stacked with documents, alongside several of the firm’s directors. “I was blessed with some very good people,” he recalled. “Guided by a culture of Emotions, Passion and Spirit (EPS), the team was committed to returning the firm to profit.”
“When I joined CDB in 2001, this was the canvas we had,” he says about the negative net worth. “But the one asset we did have was a young, highly motivated team which was determined to work towards a singular goal – to turn the company around.”
Introduced after Nanayakkara was appointed as the Managing Director and Chief Executive Officer, the EPS culture became the foundation for the recovery. It gave shape to a new mindset, one that balanced “urgency with belief, and structure with spirit”, according to Nanayakkara.
EPS created shared ownership across teams. Rather than functioning in silos, departments began collaborating, with a renewed sense of accountability and trust. Cross-functional decision-making replaced top-down directives. Mahesh Nanayakkara would later reflect on this culture with a story, “We used to play the Six Million Dollar Man trailer to our team and say, ‘This is what we should do for CDB.” The Sci-fi series ‘Six Million Dollar Man’ aired on Sri Lankan television during the 1980s, of a scientist and doctors who rebuilt an astronaut injured in a space shuttle accident to be faster and stronger.
By anchoring the firm’s comeback to its people and values, CDB unlocked a powerful advantage. This cultural advantage allowed CDB to achieve its profit targets. The EPS culture would evolve as CDB grew, but in those early years, it helped turn uncertainty into much-needed momentum.
After CDB’s net worth turned positive in 2005, it regained some stability and began looking forward. Its confidence grew so much so that it introduced initiatives like the Sisudiri scholarships and Pariganaka Piyasa IT labs, building public trust. However, its new-found resilience would soon be tested in what its leaders describe as their ultimate test of survival.
In late 2008 and 2009 eight Ceylinco group-related companies had liquidity problems when Golden Key, a Ceylinco owned firm collapsed. “When the Ceylinco crisis hit us, the reputation and trust we had founded our business on became central. Flexibility was a core value that helped us remap and re-strategise,” reflects Mahesh Nanayakkara, who as a young Managing Director and Chief Executive Officer was dealing with a major crisis.
At the same time, the firm embarked on a broader corporate transformation. It reconstituted its board, adopted a new corporate name, Citizens Development Business Finance, and refreshed its brand identity. These changes were accompanied by a relocation of its head office from Ceylinco House.
CDB turned its focus to building trust with customers and communities. Sasindra Munasinghe, who joined CDB in 2001 and is now its Executive Director of Sales and Business Development, recalls, “We hosted several town hall meetings in Negombo, Kiribathgoda, Colombo, Moratuwa and Kandy, which were open forums aimed at reinforcing transparency and reassuring stakeholders of our stability.”
On October 6th 2010, CDB was listed on the Colombo Stock Exchange and the company set for itself a target of an asset base of Rs50 billion by 2015.
The 2008-2009 crisis was the most challenging period in the firm’s history. But by the end of 2009, CDB had navigated well enough, closing the year with Rs7 billion in assets and Rs80 million profit.
“From the very beginning, we had a culture of transparency. We would unveil our plans to the entire staff at a session popularly known as the ‘Kick Off’. Everyone knew what we were going to do over the next three years,” points out Roshan Abeygoonewardena who joined CDB in 2005 and is now its Executive Director, Corporate Finance. To underscore the goals each team member was handed a letter outlining the company’s aspirations and what it expected each team member to contribute.
The end of the war in 2009 led to higher economic growth and credit demand. Besides that, the CDB board, and particularly its Chairman Rajkumar Renganathan backed the leadership team.
“I’m truly grateful for the astute leadership of former Chairman Rajkumar Renganathan. With him at the helm, the checks and balances were put in place and CDB had the courage to step forward confidently.”
Ceylinco Life Insurance, of which Rajkumar Renganathan is Executive Chairman was CDB’s second largest shareholder with a 35% stake ahead of its going public. In March 2025 Ceylinco Life was the single largest shareholder with a stake of 35%.
“I have always believed that the tone of leadership is a crucial guiding factor for a team to succeed,” muses Mahesh Nanayakkara who in 2024 completed two decades as CDB’s Managing Director and Chief Executive Officer.
Given that CDB was racing ahead, targets were reevaluated. In 2010 CDB’s balance sheet was Rs10 billion. “We set a new goal of a balance sheet value of Rs100 billion in the decade ending 2020.” Achieving this goal required sharper strategy and implementation and capital foundation to match. The firm deepened its focus on governance and financial discipline, while also seeking new avenues of funding.
In 2013, CDB secured its first international credit line with a $6 million facility from BIO (Belgian Investment Company for Developing Countries). This marked its entry into global financial markets, expanding access to foreign funding sources. Together, these early milestones laid the financial foundation for CDB’s transformation.
It was no longer in survival mode. The 2010s marked the company’s shift from recovery to rapid growth. Its assets surged from Rs10 billion to Rs94 billion, while profits climbed from Rs0.5 billion to Rs2.5 billion in the next decade. Revenue grew seven times and profits by five times. Across the decade, the company would begin launching digital services, embed sustainability into its operations, and secure foreign capital. These collective efforts would serve as the foundations for its future growth and reshape CDB into a new entity.
One of the cornerstones of CDB’s transformation during this decade was expanding its capital base. This began in 2010, when the firm was listed. The public listing marked a vote of confidence in CDB’s business model and governance, signalling the start of a new growth-focused chapter.
As part of its transformation journey in the 2010s, CDB made an early and deliberate shift towards digitalisation. In 2011, it became the first non-bank financial institution in Sri Lanka to implement a core banking system, laying the foundation for scalable, centralised operations. This marked the beginning of a long-term digital strategy to simplify access, reduce costs, and expand reach without relying on physical expansion.
By 2012, CDB began rolling out new services that enhanced digital access for customers. These included SLIPS integration for fund transfers (the first NBFI to be linked to the interbank fund transfer network), VISA debit cards, the launch of its own branded savings product, its first ATM, the introduction of Islamic finance services and the first NBFI appointed an authorised money dealer. As the decade progressed, digitalisation moved even closer to the customer. CDB iTransfer enabled fund transfers via messaging platforms.
The transformation was not limited to infrastructure. CDB’s digitalisation drive also reshaped how its teams worked. As a result, the firm’s internal EPS culture evolved to emphasise agility, cross-functional collaboration, and innovation.
“Initially the thinking wasn’t there, and innovation was limited to our IT and data science teams. However, today it’s contagious, with everyone across our operations embedded in the ecosystem,” notes Nanayakkara about the growing momentum for change.
The 2020s began in global disorder. The COVID-19 pandemic disrupted industries, markets, and institutions. In Sri Lanka, the impact was compounded by a domestic financial crisis that followed soon after. Within hours of the first lockdown, CDB activated its business continuity plans. Staff transitioned to remote work. Digital platforms carried the load as branch access was limited, and mobile transactions rose sharply. Relief measures for customers, including loan moratoriums and SME support, were implemented. Oversight tightened: liquidity was tracked daily, risk exposure reviewed constantly. Despite the volatility, CDB’s assets crossed the Rs100 billion mark in 2021, which was an inflection point reflecting the strength of systems built in the previous decade.
With stability intact, the focus shifted from coping to controlled acceleration. In 2022, CDB reaffirmed its next strategic ambition: to reach a quarter trillion asset base by 2030, supported by branchless scalability and a science-based Net Zero roadmap with the IFC.
acceleration. In 2022, CDB reaffirmed its next strategic ambition: to reach a quarter trillion asset base by 2030, supported by branchless scalability and a science-based Net Zero roadmap with the IFC.
As CDB reshaped itself during the 2010s, it made sustain ability a core part of its transformation agenda. What began as individual efforts matured into a structured framework by 2020, guided by two long-term pillars: Net Zero and Social Conscious. These efforts were not treated as side projects but integrated into the core of the business. “We integrated it into our business rather than plugging it as a separate item outside the business,” notes Mahesh Nanayakkara. “I think that was the key difference for us.”
On the environmental front, the firm moved beyond surface-level commitments, pursuing measurable and meaningful action.
“We weren’t happy with the idea of just offsetting with carbon credits,” he explains. “We wanted to do something impactful and worked with international partners to develop a scientific approach.” This approach became the foundation for CDB’s Net Zero strategy. Green financing products such as the Advance Roof Solar and eShift electric mobility solutions were launched to enable a transition to a greener economy.
CDB began measuring its carbon footprint in 2015, covering both direct and indirect emissions. Today, the company reports under the globally aligned Scope 1, 2, and 3 categories, including financed emissions, for greater transparency and focus.
With IFC’s technical support on the Climate Transition Plan, CDB has adopted a Decarbonisation Model to enhance accuracy, forecast future emissions, and align with its product portfolio mix. This model also lays the groundwork for clear targets to reduce carbon intensity in the loan portfolio, underscoring CDB’s commitment to sustainable finance.
In parallel, CDB expanded its social impact work under its Socially Conscious pillar. The firm launched initiatives for youth development, women’s empowerment, education, healthcare, and entrepreneurship. By 2025, these programmes had delivered over 1,000 scholarships and 25 smart computer labs across schools. Teams were also engaged through structured volunteering and “Green Ambassador” roles that promoted ownership and action.
Two years ago CDB funded the construction and commissioning of a third intervention centre on autism at the Karapitiya Teaching Hospital, investing Rs45 million to build a world class facility. The centres that serve to build awareness, early detection, acceptance and intervention in autism related areas are a collaboration with the Sri Lanka Association for Child Development (SLACD).
However, CDB’s widest social impact is through the deliberate focus of its lending to MSME’s (micro, small and medium enterprises) where many of the businesses are focused on areas like agriculture and fisheries. A key area of credit growth, besides lending to businesses that would otherwise find it difficult to access credit; are female entrepreneurs and for business to introduce green assets. Together, these efforts reflected a broader shift in how CDB operated.
Sustainability was no longer an aspiration. It became a main strategic pillar alongside people and technology, and would prove vital in helping CDB navigate the challenges that lay ahead.
The same year, CDB earned ISO 22301:2019 certification for business continuity and disbursed its first SME loan under the National Credit Guarantee Institution, expanding access to funding. Digital adoption remained high across the customer base. The company had not opened a new branch in 8 years but continued to scale. By late 2024, it had the systems, talent, and digital channels in place to enter 2025 as Sri Lanka’s fourth-largest non-bank financial institution.
During the year 2022, CDB introduced an AI-powered machine speed credit decision model which made it possible for the marketing team to provide credit approvals on the field. It has also made it possible for branch back-office staff to share work through the platform allowing low-volume branches to take up work from high-volume branches, explains Dave De Silva, who is Executive Director, Business Operations at CDB. “We call this work sharing Pick Me.”
“Today, 90%, of our loan book passes through the AI decision model, and the results are very encouraging,” says De Silva. He explains that back office operational efficiency has improved as a result of the ‘pick me’ work flow.
A cross functional team for credit origination, underwriting, operations, compliance, risk and IT help the marketing team to work from anywhere, anytime throughout the year. “We call this ‘virtual operations’ and in essence the marketing team can work without stepping into a branch.”
CDB has now initiated AI-powered credit ratings allowing for risk-based pricing of loan facilities. with overriding capabilities to our business heads based on completion. Many more new developments are in the pipeline which would come into fruition during this financial year.
DB’s 30-year journey has been one of persistence, reinvention, and quiet discipline. From the brink of collapse in the early 2000s, the company rebuilt itself and transformed into a market leader. Today, it stands as the 4th largest non-banking financial institution in Sri Lanka. Its three pillars of people, technology, and sustainability have ensured resilience in crisis and been the engine of consistent growth. With these pillars in place, CDB is now aspiring towards a quarter-trillion asset base by 2030. What began as a recovery effort has become a blueprint for transformation.
“Financial intermediary business is becoming invisible and the benchmark is speed,” Mahesh Nanayakkara points out. “In addition, it has to be a joyful experience for a customer,” says Mahesh Nanayakkara.
“The next chapter may bring new technologies and global partnerships, but it will be shaped by the same values that carried it through the last 30 years,” he concludes.