Over Rs.6 bln disbursed by govt. to spur agriculture, business in the North-East

The Sri Lanka government has disbursed upto Rs. 6.48 billion through a micro finance loan scheme of the Central Bank to spur agriculture, business and income generating activities in the war-affected North and East, Finance Ministry sources said. The lending rates of the two loan schemes for the development of these two regions, aimed at enhancing income generating activities, has been reduced to 9 % per annum from 12 %.

The Central Bank has introduced two special loan schemes, ‘Awakening North’ for the north and ‘Development of the East’ for the east to provide credit facilities for capital investment for the resumption of economic activities in agriculture, livestock, fisheries and micro and small enterprises. The maximum limit of each loan is Rs. 200,000 per borrower. The repayment period is a maximum of five years with a grace period of six months. A sum of Rs.3.61 billion was provided to over 21,000 people in the north as loans while 20,748 households in the east received Rs. 2.87 billion.

The Bank of Ceylon, People’s Bank, Hatton National Bank, Commercial Bank, Seylan Bank, Sanasa Development Bank, Sampath Bank and DFCC Bank are the participating financial institutions under the two loan schemes. The banks will be refinanced at an interes rate of 6 %.

A total of 121 new bank branches and service centres have been set up in the north and the eastern provinces. Some 36 bank branches in the north and 32 bank branches in the east have been established. “This shows the interest of the entire financial system to expand credit facilities to uplift the country’s economy,” a senior Central Bank official said. Providing loans will help to commence and continue their livelihoods while contributing to the economy. Although these activities are small-scale it helps to minimize the poverty element of the country, he added.

The Central Bank has conducted a comprehensive socio-economic survey in the Jaffna district to obtain post-conflict baseline data pertaining to the strengths and capabilities and challenges faced by the people in the north, he revealed.

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