New econ resurgence facility unveils for COVID-19 affected businesses
Sri Lanka took its first cautious steps towards restarting it’s slowed down economy on Monday by relaxing the curfew restrictions in areas not affected by COVID-19 to allow the limited resumption of business activities after one month of lockdown.
But the liquidity pressure is making it difficult for many business enterprises to resume their activities in the present unforeseen coronavirus situation.
Having considered this situation, the Central Bank (CB) has introduced a new resurgence facility for the businesses badly affected by the COVID-19 pandemic.
The bank has launched ‘Saubagya COVID-19 Renaissance Facility’ under the Saubagya (Prosperity) Loan Scheme on the directions of the Government.
According to CB announcement, this action has been taken by considering the national importance of reviving the businesses adversely affected by the COVID-19 outbreak.
Another aim is to contain the effect on living conditions of the Sri Lankans and the economic growth of the country as a whole.
The ‘Saubagya COVID-19 Renaissance Facility is being implemented by the Regional Development Department of the CB engaging all licensed banks in the island.
The maximum limit of the loan is two months working capital at an interest rate of 4 per cent per annum.
The borrowers will be given a maximum of 24 months including a 6-month grace period to repay the loan. Sub-borrowers are not required to pay both capital and interest during the grace period.
Sub-borrowers engaged in any income generating activity or economic activities prior to the COVID-19 outbreak are eligible for this facility.
Sub-loans will be granted to facilitate working capital requirements of the eligible sub-borrowers for their existing income generating or economic activity.
Farmers are also eligible for loans up to Rs. 5 million at 4 per cent interest rate to grow 36 crop varieties including paddy under the New Comprehensive Rural Loan Scheme (NCRCS), announced by the government.
The decision was taken at the meeting of the Presidential Task Force on Supplying Essential Goods led by former Minister Basil Rajapaksa on the directions of Prime Minister Mahinda Rajapaksa.
The loans will be granted to cultivate paddy, chillies, onions, cowpea, green gram, soya beans, kurakkan, maize, sesame, sunflower, potatoes, sweet potatoes, manioc, yam and vegetables.
It should be repaid via state banks within nine months; official sources said adding that the CB has also approved loans for the Saubhagya (Prosperity tomorrow) Home Garden Programme up to a limit of Rs. 40,000 at an interest rate of 4 per cent.
Under the Saubhagya Loan Scheme, a loan of up to Rs. 25 million will be provided at an interest rate of 8 per cent and the Swashakthi Loan Scheme will offer a grant up to a limit of Rs. 250,000 at an interest rate of 5.5 per cent.
Further the Small and Medium Enterprises Line of Credit Loan Scheme will offer loans of up to Rs. 50 million at an interest rate of 11.7 per cent.
These are among the steps that the Government is taking in a post-COVID-19 scenario to revitalise agriculture, SMEs, manufacturing and other major sectors of the economy.