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| Tuesday, 8 February 2005 |
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Susahana boon to SMEs Susahana loan scheme was introduced by the Central Bank of Sri Lanka in a bid to help small and medium entrepreneurs along the coastal belt of the country who were severely affected by the recent tsunami to recommence their businesses as soon as possible. This loan scheme is hundred percent refinanced by the Central Bank and the affected entrepreneurs are eligible to obtain loans at an interest rate of 6 per cent per annum upto Rs.100,000/= for micro enterprises and upto Rs.5 million for small and medium scale enterprises. It was reported that the Central Bank has instructed the commercial banks, development banks, finance companies and leasing companies to provide these loans without any collateral. However, some affected entrepreneurs complain that some financial institutions do not adhere to this instruction by the Central Bank. It is learnt that some banks demand collateral from these unfortunate entrepreneurs who have lost everything and desperately trying to restart their businesses. Apart from asking for collaterals some financial institutions are reported to grant these loans at higher interest rates. The Minister of Advanced Technology and Enterprise Development Rohitha Bogollagama recently said that some private banks have asked for unreasonable interest rates from the affected entrepreneurs ranging from 10 to 15 percent. It is a known fact that micro and small scale entrepreneurs find some difficulty in obtaining loans from both state and private banks even under normal circumstances. It is unfortunate that some of the financial institutions have the same rigid attitude towards the tsunami affected entrepreneurs at a time when they desperately need some kind of assistance. This attitude could also hinder the Government's efforts to rebuild the country as the support of the SME sector is vital in bringing back normalcy to these areas. Apart from that as the Prime Minister Mahinda Rajapaksa said recently at the 46th AGM of the National Chamber of Commerce the Government considers the small and medium scale sector as the country's engine of growth. Therefore, both private and state financial institutions should give their maximum support to promote this sector. However, it is noteworthy that efforts are being made by some private sector organisations including trade chambers and associations as well as individual companies to help the people in the tsunami affected areas. They have voluntarily come forward to assist these people having understood the fact that their future prosperity largely depended on the future well-being of the people in this country. Their efforts could be rendered meaningless due to the opportunistic attitudes of some people. The Governor of the Central Bank said at a recent ceremony organised by the Association of Chartered Bankers that some financial institutions here only think of short-term gains and it has damaged the reputation of the banking industry. Therefore, it is time that the regulator intervened to curb such acts which could cause further damage. |
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