The ‘Swashakthi’ loan scheme would contribute to the Government’s broader policy objective of generating one million jobs through the establishing of over 25,000 new businesses with the participation of 17 leading commercial banks, Prime Minister Ranil Wickremesinghe said.
Speaking at the launch of ‘Swashakthi’ concessionary loan scheme for Micro, Small and Medium Enterprise (MSME) Sector development at Temple Trees yesterday, Premier Wickremesinghe said that the loan scheme would address financial, technical, marketing and entrepreneurial needs especially of youth,youth graduates, women and differently abled people at grass roots level.
“The foundation for the development of a country is the development of the economy at village level with the utilisation of resources in the villages,”he added.
Referring to the funding of the ‘Swashakthi’ loan scheme,the Prime Minister said, “Rs. 1 Billion has being allocated by the Treasury as the initial fund allocation for the ‘Swashakthi’ loan scheme. “It will eventually be enhanced to Rs.4 Billion. We are anticipating that with the contribution of the banks, the fund will increase up to around Rs. 12 Billion. Also the deviations of the scheme will be identified and amended with the execution of the scheme in order to provide a better service,”the Prime Minister Wickremesinghe said.
The Premier also said that economic growth would be increased with the implementation of the loan scheme which will boost the country’s middle class.
Central Bank Governor Dr.Indrajith Coomaraswamy said a minimum of 75 start ups at each village would be expected with the new loan scheme developed by the Central Bank of Sri Lanka (CBSL) jointly with the National Policies and Economic Affairs Ministry.
Dr.Coomaraswamy further said ; “Under this loan scheme, start up businesses will be given a maximum of Rs.200,000 at a nominal interest rate of 5.5 percent.
In addition to the loan component, new entrants are eligible for a grant of Rs.50,000 to meet initial expenditure which will be provided without interest. Also existing businesses will receive a maximum loan of Rs.250,000 at an interest rate of 5.5 percent.
The beneficiaries have an opportunity to repay the loan within a period of 5 years including a maximum grace period of 12 months”.
He also said that the CBSL had contributed a comprehensive amount of USD 79.5 Billion for various loans for Small and Medium scale enterprises over the past five years.
“The main objective of CBSL granting loans is to eradicate poverty and contribute towards the country’s economic growth,” Dr.Coomaraswamy added.
Dr.Coomaraswamy instructed the 17 participating banks to assess the viability and strength of the project plans when granting loans rather than only assessing the strengths.
Women and Child Affairs Minister Chandrani Bandara and National Policies and Economic Affairs State Minister Niroshan Perera also participated.
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