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Monday February 6th, 2023

Sri Lanka govt widens low interest loan schemes

ECONOMYNEXT – The Sri Lankan government has widened a credit scheme at subsidized interest rates to promote entrepreneurship to include tourism, which was badly hit by recent bombings, and doubled housing loans.

The finance ministry said eight credit facilities under its ‘Enterprise Sri Lanka’ loan scheme that aims to create one hundred thousand entrepreneurs within a year was approved by the Cabinet of Ministers this week.

The ‘Ran Aswenna’ loan scheme that targets productivity of agriculture has been extended to cover the tourism industry, a statement said.

Entrepreneurs in tourism can borrow up to 250 million rupees to buy equipment required for water-based tourism such as motor boats.

The five million rupee housing loan granted under the Medium Income Housing Loan Scheme has been replaced with ‘Home Sweet Home’ Loan scheme with the amount increased to 10 million rupees.

“This loan could be repaid within 25 years and the borrower has to pay only 6 percent of the interest,” the statement said. The previous five-year relief on the interest has been extended to 15 years.

The finance ministry said there are 22 relief loan schemes implemented under Enterprise Sri Lanka loan schemes introduced by the government.

Among them are 17 loan schemes under relief interest, three reimbursable loan schemes and two non monetary programs.

Nearly 81 billion rupees of loans have already been approved under the relief interest loan scheme and 55 billion rupees have been granted as loans by the state and private banks.

The ‘Sihina Maliga’ loan scheme to enable migrant workers build houses has been changed to be paid in several stages and extended to include buying condominiums.

This was done as many expatriate workers enter into short term agreements of about two years, making them ineligible for loans of 10 million rupees to be paid within a period of 15 years.

This loan will also be granted to build a new house, renovate the existing house, demolish the current house and build a new house, buy land and put up a house and to buy an old house and renovate it.

A five year grace period has been given for the borrowers of ‘City Ride’ loans to repay their loans.

Loans to buy mini taxies and electronic three wheelers have been increased by 250,000 rupees to a maximum of 2.25 million rupees as vehicle prices have increased, the finance ministry said.

Students who fail to enter state universities can borrow up to 1.1 million rupees to continue their higher education at private universities at an interest of two percentage points over the Average Weighted Prime Lending Rate.
COLOMBO 31 May 2019)


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Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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