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| Thursday, 06 January 2005 |
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CB refinance scheme to help Tsunami hit SMEs by Channa Kasturisinghe The Central Bank of Sri Lanka (CBSL) has introduced a special refinance scheme for the benefit of small and medium entrepreneurs who have been affected by the Tsunami. Those affected will be able to borrow from Rs. 100,000 to Rs. 5 million at a 6 percent interest rate from Commercial banks and other financial institutions. Central Bank Governor Sunil Mendis told the media yesterday that these loans will be 100 percent refinanced by the Central Bank and it will provide funds for the lenders at 5 percent interest rate. "This initiative has been taken in order to help rebuild the SMEs within the shortest possible time. The entrepreneurs who borrow under this scheme will be offered a grace period of one year. The entrepreneurs can obtain 85 percent of their financial requirements through the lending institutions while they will have to contribute 15 percent by way of cash or otherwise," the Governor said. Deputy Governor W.A. Wijewardena said that money will be allocated out of the funds within the CBSL and there will be no additional burden on the monetary policy or the need to print currency notes for this purpose. He also said that the Central Bank has had discussions with the state and private Banks on rescheduling of existing loans obtained by entrepreneurs affected by Tsunami. **** $150m emergency loan by IMF The CB Governor said the International Monetary Fund (IMF) will provide an emergency loan to the tune of US$ 150 million. The IMF has also released the pressure on the Sri Lankan Government by extending the time frame to settle US$ 300 million provided earlier as loans. **** Rupee to appreciate further The Governor also said that rupee will continue to appreciate against the dollar in the days to come due to the inflow of foreign funds. The rupee has appreciated by about 2 percent during the past few days from Rs.104.50 to below Rs.101 against the dollar. He said however the exporters need not fear as it would not have a major impact on their businesses. |
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