Sunday, 12 January 2020 07:46

New aid package for Sri Lanka’s SMEs

To assist Sri Lanka’s Small and Medium Scale Enterprices (SMEs) stay buoyant as the economy flounder, the government is poised to introduce new relief package from next week, with the approval of the Monetary Board.

Development Banks and Loan Schemes State Minister Shehan Semasinghe has announced the debt relief package with the aim of gaining active contribution of entrepreneurs to achive economic growth of 6.5 percent.

Inaddition to debt relief for the troubled SME’s , commercial banks have been directed to provide a short-term working capital loan to all SMEs to resume or continue business.

The licenced banks has ben asked to provide three-month working capital with a three-month grace period which will be paid within six months, under the latest relief package.

SMEs who have been servicing the loans will be supported with fresh five-year loans up to Rs. 300 million if needed with a one-year grace period to expand their business activities at an interest rate below 10% based on new business plan.

The Central Bank will also introduce a Credit Guarantee Scheme for the licenced banks on a voluntary basis.

Further, he said the Finance Ministry had strictly instructed banks to prohibit purchasing luxury vehicles for personal use via this new working capital loan scheme.

The debt relief package is not limited to a particular sector and therefore any SME business that had obtained less than Rs. 300 million would be eligible for it.

Further all legal actions taken against troubled SMEs who failed to repy their bank loans will be suspended with immidtae effect on the direction sof the government.

Banks have been adviced to write off the total interest of fines imposed on troubled SME’s.

(LI)

 

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