Business owners with insolvent enterprises have been given an opportunity to renegotiate and/or extend the terms of the loans taken by them from banks although permitting these firms to continue operating poses a significant impediment to growth and economic efficiency.

These firms are to be made efficient or productive to remain competitive in the local market at a time where Sri Lanka is emerging from the economic crisis to a stronger and more resilient economy, a ministry official said.

The challenging macroeconomic environment that prevailed during the recent years disrupted many business entities limiting their income-generating capabilities and hence forcing them to default timely payments of loans, which resulted in impairing the recovery process of licensed banks (LBs).