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SLCSMI meets Monetary Policy Consultative Committee

The Monetary Policy Consultative Committee (MPCC) of the Central Bank invited Sri Lanka Chamber of Small and Medium Industries (SLCSMI) President Aloy Jayawardene to discuss the lending rates to the SME sector. Jayawardene was accompanied by Senior Vice President K. Chandrasekeran and General Secretary Rohan de Silva.

The meeting was chaired by Prof. A.D.V. de S. Indraratne with other members of the Committee comprising Sohli Captain, and private sector professionals Preethi Jayawardene, Mahen Dayananda, R.M.B. Senanayake, Yohan Perera and Cubby Wijetunge. The banking sector was represented by HNB CEO/MD and President of the Bankers Association Rajendra Theagarajah.

Jayawardene, being the only representative from the Chambers to present the case of the SMI with problems related to finance affecting the SMIs said “Today the SMIs need a bailout from the Government. It is not lowering of interest rates, but a stimulus grant package from Government for SMEs to stay above water.

Many workers are being laid off from SMI units and at the same time, many of them are closing up, which are adding up to the burden of families associated with this sector.

The Government should take this threat seriously, and go onto the extent of suspending labour laws to allow lay offs and prevent it being challenged in Court till the crisis is over. Our bank loans, interest on loans, taxes and other rates should be put on hold for the next two years. The Government should understand that SMIs are the vital log in our country’s economy which represents 70 percent of our economy. A kick start should be given to the SMEs if the economy is to develop.

The majority of our entrepreneurs who have failed to pay their monthly instalments and interest to the commercial banks after having mortgaged their residential homes and properties and even their vehicles. Today the banks are attempting to take over the mortgaged assets as they are unable to meet their monthly instalments to the banks, due to their present economic hardships.

The commercial banks have restricted the granting of TODs, even at the present rate of 26 percent-28 percent. The banks are reluctant to extend this facility.

Some entrepreneurs extend credit to most of the Government institutions with whom they transact business. We request the Central Bank’s intervention on allowing TOD facilities to Government supplies at a nominal rate of interest, based on the receivable amount from government institutions. It is noted that the Government institutions generally take over three months to settle our bills and in some instances it extends to 5-6 months, Jayawardene said.

Jayawardene said, that a bail out package is what is needed, failing very soon 60 percent of the SMI sector will be closing up with a number of workers out of billet.

As no response was made possible at the meeting, Jayawardene has appealed to the President, explaining the plight of the SMI Sector and requesting a meeting to discuss further on this matter.

 

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