Saturday, June 15, 2024

Latest Posts

New loan relief package of Rs 5 billion unlocks this week for grappling MSMEs

By: Staff Writer

June 03, Colombo (LNW): New loan relief package amounting to Rs 5 billion will be unlocked this week for Sri Lanka’s Micro, Small and Medium Enterprises (MSMEs) hit by the Covid-19 pandemic and economic crisis, Secretary to the Ministry of Industries Shantha Weerasinghe said.

The finance ministry in collaboration with ministry of industries will provide credit facilities of Rs 5 million each to 1000 selected existing MSMEs for further expansion and recovery of their businesses via licensed commercial banks and licensed specialised banks at concessional interest rate if seven percent.

The special feature of this loan scheme is that people who are blacklisted (CRIB) too could get the loans. Loans up to Rs. 5 million can be obtained under the scheme and settled in five years with a grace period of six months.

Loans will be given on personal guarantees up to Rs. 200,000 and a property collateral must be submitted for loans above that amount.

The final work on the loan scheme was completed last Wednesday and these loans will be provided through 10 State and private banks.

These loans can be applied for through the Regional Development Bank, People’s Bank, Bank of Ceylon, Sampath Bank, Seylan Bank, Commercial Bank, Cargills Bank, Sanasa Development Bank, Hatton National Bank and Nations Trust Bank.

Another aspect of this scheme is that loans up to Rs.15 million can be applied for investment purposes. For that too, the interest rate is seven percent and the repayment period is 10 years with a grace period of one year

Moreover special loan scheme amounting to Rs.3 billion will be implemented with support from the Asian Development Bank (ADB) in addition to the 2024 budgetary support.

The government is also considering the possibility of upgrading the Sri Lanka Savings Bank a subsidiary of the National Savings Bank to a MSME Bank or to set up a special purpose vehicle (SPV) to disburse loans easing the burden on the banking sector.

MSMEs are to be empowered by introducing digital literacy programs and providing affordable access to technology to compete in the global marketplace.

The micro, small, and medium enterprise (MSME) sector in Sri Lanka accounts for 90 percent of all businesses in the country, provides 45percent of employment, and contributes 52percent to the GDP.

A recent ILO study revealed that 79.8 percent of the one million MSMEs that operated in 2018 were still in operation Among the 20.2 percent businesses either permanently or temporarily closed, 8.3percent of closures were reported to be due to economic crisis while 11.9percent were due to reasons other than economic crisis.

Latest Posts


Don't Miss

Stay in touch

To be updated with all the latest news, offers and special announcements.