Govt opens first sme Bank in Anuradhapura

The first branch of the SME Bank affiliated to the People's Bank, was opened at Anuradhapura recently by Economic Development Minister Basil Rajapaksa, during the " Dayata Kirula " expo. The objective of the SME bank is to extend credit facilities to micro, small and medium scale entrepreneurs in the country at a minimum interest rate in order to develop local private sector.

President Mahinda Rajapaksa sought the views of a cross section of the public and business community operating at grass root level when formulating the 2012 budget, At this time the Regional Chamber Advocacy Forum (RCAF), an informal grouping of district Chambers of commerce, were able to forward their proposals representing the collective voice of local businesses. The RCAF proposals voiced the need for an SME bank because most local entrepreneurs face difficulties in accessing credit from the traditional banking system. The idea of the RCAF was to lobby the government through the budget submissions to establish a bank dedicated to the SME sector in the country. As a result, the first small and medium scale bank which is affiliated to the People's Bank was opened at Anuradhapura recently.

Expressing his views on this remarkable achievement based on representations made by the local business community, Secretary of the Regional Chamber Advocacy Forum and Director General of the Anuradhapura District Chamber of Commerce P. B. Dissanayake said, "The RCAF made a suggestion to the government to establish such a specialized bank, and accordingly the request was considered in the budget proposals of 2012. The Regional Chamber Advocacy Forum would like to take this opportunity to express its profound gratitude to President Rajapaksa and the government for the prompt action taken to set up this financial institution. This is a big step forward to a better business climate in the regions".

The salient features of the Small and Medium Scale Enterprises Bank is that it is a specialized financial body with the core objective of extending credit facilities specifically to micro, small and medium scale businesspeople. The scheme will provide credit facilities with priority given to project reports submitted by prospective applicants. The SME Bank will disburse funds on the basis of a simplified, flexible collateral policy and a low rate of interest on credit with a suitable grace period for the repayment.

The government will open the SME banks in affiliation with People's Bank, Bank of Ceylon and other provincial-based development banks island wide in the future.