SMEs get national credit guarantee for sustenance

SMEs get national credit guarantee for sustenance

10 June 2019 10:59 am

Sri Lanka for 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 affected by Easter terror.

Finance Minister Mangala Samaraweera told 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.      

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 the financial assistance of the ADB amounting to US$ 100 million from its Ordinary Capital Resources as the seed capital required to establish this institution.

Further, it has been planned to establish this Institute as a Limited Public Company under the Companies Act in Sri Lanka.

Loans under this scheme for SMEs will be at a low rate of 1-2 percent a senior ministry official said adding that the government will subsidize 75 percent  of the monthly installment, including the loan installment and interest for SMEs.

During the years 2018 - 2020, the Government expects to establish 50 agro and fishery entities, 25 majority women owned entities and 150 youth centric startups, finance ministry sources revealed.  

These entities will be established under the Companies Act or legally registered corporative societies or farmer organizations.

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 (07) societies and one (1) SME Company have already been registered and the Government has also planned to provide subsidised loans such as 75 percent of monthly installment including the loan installment and the interest for small and medium sized companies, ministry sources said.

85 percent of the monthly installment including the loan installment and the interest for women-led SME companies and 90 percent of the monthly installment including the loan installment and the interest for SME companies operated by differently able  persons through the “Enterprise Sri Lanka” Credit Scheme to these companies, he added.