Saturday, 04 July 2020 11:16

Covid-19 Renaissance Loan Scheme implements in full swing

Covid-19 Renaissance Loan Scheme for affected Sri Lankan businesses is being implemented in full swing with relevant banks expediting the disbursement of loans among the needy entrepreneurs.

Under Phase-I of the Loan Scheme implemented with effect from 01 April 2020, the Central Bank granted approval for 13,926 loans amounting to Rs. 28 billion.

Out of approved loans, Licensed Banks have already disbursed more than Rs. 21 billion among 10,270 affected businesses and individuals island wide as of 02 July 2020.

Under Phase-II of the Loan Scheme implemented with effect from 19 June 2020, the Central Bank approved 6,314 loans amounting to Rs. 25 billion distributed among 6,314 businesses and individuals.

Out of Rs. 53 billion approved under both Phases I and II of the Scheme, 45% has been provided to businesses in the services sector led by trade services, while distributing 38% and 17% among businesses in the industry sector and the agriculture sector, respectively.

The Central Bank has announced Phase-III of this Loan Scheme with a credit guarantee and interest subsidy with effect from 01 July 2020.

The aim is to accelerate lending at 4% per annum using the already available excess liquidity with Licensed Banks and to ensure adequate flow of funds for businesses which lack collateral to back their creditworthiness.

Accordingly, the Central Bank will share a major portion of credit risk of end borrowers, while providing an interest subsidy of 5% per annum to banks to cover their cost of funds.

The credit guarantee provided by the Central Bank ranges from 80% for the smaller loans to 50% for relatively larger loans. Submission of loan applications under the Loan Scheme can be made to respective banks until 31 August 2020.


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