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Wednesday May 12th, 2021
Economy

Sri Lanka to set up state agency to guarantee SME credit

ECONOMYNEXT – Sri Lanka will set up a National Debt Securities Centre to guarantee debt of small and medium entrepreneurs in the country, Co-Cabinet Spokesman Keheliya Rambukwella said.

The minister said that the government has introduced various methods to encourage and increase the production of Small and Medium Entrepreneurs in the country.

“But when they go to banks seeking loans, they face various problems, they will be asked to keep certain things in the bank as a guarantee,” Minister Ramukwella said.

“This has become a huge problem to Small and Medium Entrepreneurs.”

The Cabinet of Ministers had given approval to set up the new state agency.

So the National Debt Securities Centre, he said, will give a guarantee on behalf of Small and Medium Entrepreneurs for the loans they will obtain from banks and other financial institutions which are under the purview of the Central Bank.

A credit guarantee will create a contingent liability for the government, where tax payers will have to pay the defaulted credit to the bank. (Colombo/April27/2021)

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