SMEs get national credit guarantee for prosperity and sustenance
Sri Lanka’s small and medium scale entrepreneurs exceeding one million will be getting more financial and credit facilities as well as non-financial support from the Treasury to contribute their share towards economic prosperity of the island nation.
Finance Minister Mangala Samaraweera told a recent official meeting at the Treasury it is essential to provide much needed windfall to the country’s entrepreneurs and small businesses diverting the sector towards exports.
The National Credit Guarantee Institution (NCGI) is aimed at offering long term credit guarantees for small and medium scale entrepreneurs.
The Government has proposed to establish a NCGI with financial assistance of the ADB amounting to US$ 100 million from its Ordinary Capital Resources as the seed capital required to establish this institution.
Loans under this scheme for SMEs will be at a low rate of 1-2 per cent a senior Ministry official said adding that the government will subsidise 75 per cent of the monthly installment, including the loan installment and interest for SMEs.
During the years to 2020, the Government expects to establish 50 agro and fishery entities, 25 majority women owned entities and 150 youth centric startups, Ministry sources revealed.
These entities will be established under the Companies Act or legally registered coorporative societies or farmer organisations.
The German International Cooperation (GIZ) has been selected as the consultant for this assignment and they have provided the required technical assistance for the SME companies which will be established under this programme.
Accordingly, seven societies and one SME company have already been registered and the Government has also planned to provide subsidised loans such as 75 per cent of monthly installment including the loan installment and the interest for small and medium sized companies, sources said.