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Wednesday February 28th, 2024

Sri Lanka IFAD-backed program to give low interest loans to farmers

MARKET ORIENTED: Floriculture is an area supported by the SAPP smallholder project

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)

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Sri Lanka Treasuries yields edge up after steep fall

ECONOMYNEXT – Sri Lanka’s Treasury bill yields edged up across maturities at Wednesday’s auction with the 3-month yield up 09 basis points to 9.87 percent, data from state debt office showed.

The debt office sold 27.5 billion rupees of 3-month bills after offering 35 billion rupees.

The 6-month yield rose 09 basis points to 9.95 percent with 37.23 billion rupees of bills sold, after offering 47.5 billion rupees.

The 12-month yield went up 03 bis points to 10.05 percent, with 39.5 billion rupees of bills sold and 40 billion rupees offered.

Sri Lanka’s Treasuries yield have come down sharply in recent weeks.

The trend was partly helped by some banks which were earlier not buying into bills, starting to buy them.

Deposit in the central banks overnight window (private sector sterilization) has come down from around 200 billion to around 130 billion rupees in recent weeks.

Sri Lanka’s central bank in the past have triggered currency crises and eventual high corrective rates by not allowing Treasury bill yields to move when up private credit picks up and buying them into the balance sheet.

The resulting forex problems are then blamed on budget deficits (politicians) and current account deficits (mainly imports of the public usually petroleum, gold or cars).

The central bank can still buy Treasury bills outright from banks, term or overnight to inject money, alter rupee reserves of banks and encourage them to overtrade and trigger forex shortages, confidence shocks, capital flight and a second default, critics say.

The central bank recently lifted counterparty limits of standing facilities, which are given at the policy rate without a penalty unlike in countries with greater monetary stability.

In recent weeks the central bank has oversold bills outright and injected money long term and short term, though so far overall net injections have been deflationary. (Colombo/Feb28/2024)

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Sri Lanka stocks close up, retail activity coming in

ECONOMYNEXT – The Colombo Stock Exchange closed up on Wednesday, data on its site showed.

The broader All Share Index closed up 55.29 points, or 0.52 percent at 10,678; while the S&P SL20 Index closed up at 3,056 points, up 0.06 percent, or 1.73 points.

Turnover was at 1.2 billion.

Market participants said that “retail activity is also picking up.”

Hemas Holdings Plc saw large volumes being traded, contributing 90 million to the day’s turnover. The share closed up at 75.00.

Kapruka Holdings Plc announced that it had purchased 197,015 ordinary voting shares of its subsidiary Kapruka e-Commerce (Pvt) Ltd for 13.2 million rupees at 67 a share. The proceeds will be used by Kapruka e-Commerce “to fulfill the IPO objective of launching Kapruka Partner Central, the company said. The share closed down at 6.80.

E B Creasy and Company Plc announced a disposal of investment in its subsidiary, Lanka Special Steels Limited (LSSL) in accordance with the restructuring process of the E B Creasy Group. The Board resolved “to divest its 100% stake represented by 2,138,657 shares in its subsidiary Lanka Special Steels Limited (LSSL), to subsidiary company Laxapana Batteries PLC (Laxapana) for a total consideration of Rs694mn which will be settled in installments. Shares of E B Creasy and Company Plc closed up at 22.00.

Sectors that attracted investor interest were Capital Goods (376mn), Food, Beverage and Tobacco (181mn), and Banks (166mn).

Positive contributors to the indices in the day included Hayleys Plc (up at 82.00), Chevron Lubricants Lanka Plc (up at 104.00), Vallibel One Plc (43.30), and Cargills (Ceylon) Plc (up at 349.75) whose Chairman Ranjith Paige donated 3 million rupees to the ‘Children of Gaza Fund’ earlier today. (Colombo/Feb28/2024).

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Sri Lanka Education Ministry asks schools to keep children out of sun

ECONOMYNEXT – Sri Lanka’s Education Ministry has warned school officials against exposing children to the sun as the Natural Hazards Early Warning Centre issued a heat index advisory.

“As extreme hot weather may rise further today, tomorrow and the next day (Feb 28, 29 and March 1), avoid keeping school students outdoors in high temperatures,” the ministry said in a statement.

With temperatures expected to increase in the next few days, “students in any school in the island will not participate in outdoor sports training activities or sports events”. The Ministry of Education has advised all schools to refrain from engaging in any other external activity.

Instructions have been forwarded to the provincial and regional education authorities to inform principals, and “to proceed according to the series of instructions issued by the Ministry of Health”.

According to the Department of Meteorology forecast, the heat index, the temperature felt on the human body, is expected to increase up to the ‘Caution’ level at some places in the North-western, Western and Southern provinces and Ratnapura District.

A ‘Caution’ level denotes ‘fatigue is possible with prolonged exposure and activity. Continuing activity could result in heat cramps.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children [or pets] unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
(Colombo/Feb28/2024)

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