Sri Lanka banks overcharging poor farmers for credit checks
ECONOMYNEXT- Some Sri Lankan banks have been found overcharging rural farmers for Credit Information Bureau (CRIB) checks for loan applications, a consultant for a United Nations agency said.
"A CRIB check is 100 rupees but banks charge loan applicants 1,000 rupees," rural finance expert Rauno Zander attached to the International Fund for Agriculture Development (IFAD) said.
"That should not be happening," he said at a business forum in Colombo held to assess and solve problems in a rural agriculture development program.
The project is worth 105 million dollars, of which 54.4 million dollars in funding is from IFAD.
The program offers 30 million dollars in a credit line, with a concessional interest rate of 6.5 percent.
Nine banks are offering the cheap credit to poor farmers , but not all are overcharging borrowers for credit checks, he said.
The nine banks are Bank of Ceylon, People’s Bank, DFCC, Hatton National Bank, Regional Development Bank, Cargills Bank, Sampath Bank, Commercial Bank and Sanasa Development Bank.
The program is now asking banks to contribute their own funds to the credit line, with the interest rate to be negotiated based on market rates. (Colombo/Jan11/2019)