People’s Bank’s assistance to support distressed customers and businesses
View(s):People’s Bank, one of Sri Lanka’s leading state-owned commercial banks, has taken steps to provide concessions and financial support to strengthen and uplift small and medium-sized businesses (SMBs) affected by the recent Cyclone Ditwah. Amid almost every disaster that has impacted Sri Lanka, People’s Bank says it has always taken steps to uplift the people of this country, not just based on profit, but through fully understanding its responsibility as a responsible state-owned bank.
Mr. Wickrama Narayana
According to People’s Bank SME, Development and Microfinance Deputy General Manager (DGM) Wickrama Narayana, with the advice and support of the Central Bank and the Ministry of Finance, the bank has launched a special programme to uplift customers and businesses affected by this disaster. Following is a discussion with the DGM.
“If we look at this disaster that our country has faced, it is different from the decades of war and the COVID crisis. Now this has happened. Here, businesses could have been damaged in several ways, one of which is the damage to property. For example, if they are completely washed away, if the building is damaged, they have to rebuild it. In addition to this, the majority have a working capital requirements. They need to cover future expenses, buy raw materials, pay water bills, and electricity bills,” he said in a interview.
He said under two sets of solutions introduced by the Central Bank of Sri Lanka, the existing capital loan amount and interest of the current borrowers can be completely unpaid for a period of three to six months, or, the capital loan amount can be delayed only by paying the interest. During this loan suspension period, no interest rate higher than the relevant contractual interest rate will be charged, and no interest will be charged on the deferred interest amount accumulated. This also applies to personal loans.
The second option is to obtain investment capital or working capital loan to cover the damage to their business. For this, the customer must have a good assessment of the damage caused. After receiving the loan request, the bank officials study it and decide on the loan amount to be granted. This is offered at a maximum concessional interest rate of 9 per cent and can be paid within two years.
The government has introduced a loan scheme by allocating funds from the Ministry of Finance which is being implemented by only three state-owned banks, including the People’s Bank. Although this loan amount is applicable to all personal and business loans, this is applicable only to micro, small and medium-sized enterprises (SMES). Micro businesses with an annual turnover of up to Rs. 20 million will be provided with loans of up to Rs. 250,000 and SMEs with an annual turnover of up to Rs. 1 billion will be offered loans of up to Rs. 1 million. This is available only for working capital requirements of two months.
He said the People’s Bank has also established a ‘Business Revitalization Unit’ to revive micro, small and medium-sized enterprises facing problematic situations.
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