ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon said it would provide a total of 10 billion rupees in loans to Coronavirus hit small and medium enterprises at 8 percent from a credit re-financed by a development lender.
Commercial Bank said it will give 2 to 25 million rupee loans with women-related businesses, agriculture and export related businesses getting priority.
The scheme could be used by businesses that missed on a 50 billion rupee central bank re-financed credit facility.
“Applications for financial assistance continue to flow in, and we have to support as many of them as possible,” Commercial Bank Managing Director S Renganathan said in a statement.
“The pressure on businesses and economies is universal, but it is at times like these that banks can display leadership and show what they are truly made of.
“We will continue to look at new options and avenues to help businesses survive this crisis.”
Firms in food and beverage, herbal and medicinal products, IT and software development, spices and processed spices, textile and garments including health-based protective products, rubber-based products and innovative light engineering products are eligible to apply.
SMEs which are members of Commercial Bank’s Biz Club could also apply.
Businesses shut-down by Covid-19 with a turnover of less than 750 million rupees are eligible, but not subsidiaries of larger groups or those with credit exposures over 250 million rupees will not quality.
“When applying for the loan, the equity contribution rate of the borrower should be at least 10 percent of the proposed requirement,” Commercial Bank said.
“Borrowers can repay loans within 36 months, based on the cash-flow generation of their businesses.”
The loans are backed by a 50 million US dollar credit from a development lender. Interest would be 8 percent, reviewed annually.
Commercial Bank said it had reduced lending rates in May for new loans, leases, pawning and overdraft facilities.
Rates on agribusiness ‘Diribala’ branded loans for SMEs and micro enterprises were cut by 2 percent, while green loans and leases to help convert to renewable energy were cut up to 1.5 percent.
‘Biz Loan’ and personal loan customers are also getting lower rates of interest between 0.5 to 1.5 percent, the bank said.
Commercial Bank has a network of 268 branches in Sri Lanka, 19 in Bangladesh. It also has control of a bank in Maldives and has a micro-finance company in Nay Pyi Taw and representative office in Yangon Myanmar. (Colombo/May31/2020)