HNB launches Rs. 5 bn SME scheme to support post-COVID recovery
View(s):HNB PLC, in an effort to finance a grassroots revival of the Sri Lankan economy in the wake of the COVID-19 pandemic, on Friday announced the launch of a Rs. 5 billion relief fund which will be used to provide working capital support to the bank’s substantial portfolio of Small and Medium Enterprise (SME) customers.
“Following on the action taken by Government and public health officials to curtail the spread of COVID-19 in Sri Lanka, a new sense of normalcy is gradually being restored. Moving forward, our next major challenge is to similarly contain the damage inflicted on the health of our nation’s economy from nearly three months of relative stagnation. HNB is fully committed to partner with all stakeholders in this endeavour,” HNB Managing Director/CEO, Jonathan Alles said in a media release issued on Friday.
The HNB COVID recovery fund will be leveraged to bolster assistance to the SME sector by complementing the Central Bank of Sri Lanka (CB) supported Saubagya COVID-19 Refinance Loan Scheme.
Hence applicants who are unable to secure Government funded loans at 4 per cent p.a. will be given the option of securing a working capital loan via the HNB COVID relief fund at a concessionary interest rate of just 8 per cent p.a. for a maximum period of 24 months.
“As a bank we understand that these are difficult times, and so we are doing everything we can to be flexible with repayments and assist customers in any way we can to get through this uncertain and volatile period. We remain confident that the launch of this fund – which operates independently from the Saubagya COVID loan scheme – will help catalyse an organic grassroots revitalisation of the Sri Lankan economy in the months to come,” HNB DGM – Retail and SME Banking, Sanjay Wijemanne explained.
The release said that as the first private sector commercial bank to enter the SME space, HNB has a long history of supporting SME development in Sri Lanka. Over the past year, the bank said it took further extraordinary measures to assist SME clients, initially through the provision of loan moratoriums and working capital loans to businesses negatively impacted by the Easter Attacks of 2019.
Additionally, the bank also seeks to actively align its operations with national priorities. Prior to the current COVID-related stimulus packages, HNB was intensively engaged in promoting credit support to accelerate economic growth to support SMEs engaged in manufacturing, services, agriculture and related value-added businesses that were facing challenges stemming from a subdued macroeconomic environment.
This support was further extended to SME clients following the onset of the COVID-19 pandemic. At present, HNB has facilitated over 2,500 clients to apply for relief under the CB Saubagya working capital loan scheme, in addition to providing over 75,000 individuals and enterprises with debt moratoriums.