Sri Lanka IFAD-backed program to give low interest loans to farmers
ECONOMYNEXT – Sri Lanka’s Sanasa Development Bank Plc., has joined a program backed by a UN agency that seeks to transform subsistence farmers into commercial growers linked to distribution and export companies.
UN’s International Fund for Agricultural Development (IFAD) has given 55 million dollars to Sri Lanka’s Smallholder Agricultural Partnership Program (SAPP), as core funding.
It is supplemented with co-funding from domestic private firms, domestic financial institutions and also savings of beneficiaries which will take the total up to 105 million US dollars.
The SAPP program aims to link 25 private companies including exporters, with 57,000 small farm households in the six year program period.
Farmers will be helped to improve product quality.
“The SAPP has already provided the relevant facilities for more than 20,000 households,” Director Yasantha Mapatuna said.
“Apart from this loan, we will provide adequate facilities such as grants up to 800 US dollars to purchase new equipment, new technology likewise.”
Under the program 2,500 poor young women and men will be supported in becoming entrepreneurs.
SAPP had granted loans up to 22.4 million US dollars to date.
Sanasa Development joined the program as a participating financial institution on Friday.
“Currently we are maintaining a base of one million account holders,” Sanasa Chief Executive Officer Thilak Piyadigama sid.
“Our main objective is to identify the value chain of the process and support the rural farmers by providing financial facilities.”
It has a wide network of 94 branches with a large customer base of borrowers around the country reaching out to rural areas.
The fund is administered by the Central Bank of Sri Lanka. When a participating credit institution initiates a loan, the central bank will release funds.
The institution will get funds at 3.5 percent and borrowers will pay 6.5 percent. Ten banks are giving loans under the program. (Colombo/Sept06/2019)