SMEs in luck’s way with more financing

Hathoon Sheriffdeen

LOAN FACILITIES: “Banks in Sri Lanka are looking for more finance credit lines to promote Small and Medium Enterprises. We had 14 credit lines in the early years. Whereas, now we have only one credit line, which is normal for all the loans,” Vice President Branch Banking, DFCC Bank, Ananda Kumaradasa said.

There is a great demand for DFCC SME loans. We have a separate unit for SME financing, which is very active. In 2005/2006, Rs. 8 billion was granted and it has increased to Rs. 13.5 billion for 2006/07.

There is a greater demand for SME financial instruments in the financial market, Kumaradasa said. He said that this type of financial facility is very effective, to develop economic values for a country.

In the case of DFCC the non-performing asset ratio or loan recovery ratio is 4.6 per cent, which shows that these types of loans are well managed. They are watched very closely and given enough guidance if necessary by the banks.

“Now we are negotiating with various donor organisations, who subsidise the Small and Medium Enterprises loans. These subsidised loans are with different credit lines and which are much lower than the normal credit lines in the market.

Asian Development Bank (ADB), Japanese Bank for Internal Corporation (JBIC), World Bank and KFW are the main donor organisations, who provide soft loan schemes to promote the credit lines of Small and Medium Enterprises loans,” he said.