bank loans for buffer zone businesses
By Marisa de Silva
Thousands of tsunami victims who lived within the
100-metre buffer zone will not receive any financial help to re-build
their businesses or industries because lending agencies will not
accept their existing properties as collateral for loans.
finance and leasing companies were among those called upon by the
Central bank to disburse the government's "Susahana" tsunami
relief loan scheme.
view of the Government's policy decision over the 100 metre buffer
zone, the Central Bank cannot allow the lending organisations to
accept properties within this zone as collateral.
loans were to be extended to the fisheries, hotel, shops and small
industries to help rebuild the businesses or livelihood of the tsunami-affected
Central Bank signed an agreement with commercial banks, licensed
specialist banks, registered finance companies and registered leasing
companies to refinance them.
in turn will help finance their customers to get their businesses
back on the road according to the scheme. This loan scheme empowers
banks to grant loans to the tsunami victims, with the assurance
of being refinanced by the Central Bank.
the main problem has been that the banks are unable to obtain a
proper security from victims residing within the 100-metre buffer
zone. Central Bank Deputy Director K.P.N.S. Karunagoda said banks
would have to take the risk if they gave loans to tsunami victims
without any collateral. He said it was a serious problem and needed
to be addressed urgently.
Savings Bank Credit Manager A. Amaratunga said they were not sure
whether or not they should process loan claims from those within
the 100-metre buffer zone and were awaiting guidelines from the
National Bank Credit Manager Lalith Wickramanayake said they were
only dealing with victims whose properties were beyond the 100-metre
Bank Credit Officer Lasantha Fonseka expressed similar views saying
that giving loans to tsunami victims without a proper collateral
would be a problem. Commercial Bank Assistant General Manager Nimal
Lukshman said they would consider loan applications on a case-by-case