Govt. to provide more relief under Enterprise Sri Lanka loan scheme

The government has decided to grant financial facilities for 8 new loan schemes under Enterprise Sri Lanka Loan Scheme, which targets to create one hundred thousand entrepreneurs in the country within a year, the Ministry of Finance said.

The proposal submitted by the Finance Minister Mangala Samaraweera, to broaden this loan scheme further, has accordingly been approved by the Cabinet of Ministers. 

The minister had initially made these proposals for this loan scheme in the National Budget 2019.

Issuing a media release, the ministry stated that the ‘Ran Aswenna’ loan scheme, which targets productivity of agriculture, has now been extended to cover the development of the tourism industry. Accordingly, those who are engaged in the tourism sector are facilitated to purchase equipment required for the water-based tourism sector, such as motorboats and other required apparatus. This loan could be obtained up to a maximum sum of Rs.250 million, the statement said.

The ‘Riya Shakthi’ loan scheme, which is meant to provide loan facilities to owners of school transport services for purchasing buses, has now been extended to include the school transport operators at the district level on the recommendation of the district school transport operators associations, the Ministry of Finance further stated.

A housing loan of Rs 5 million, which was granted earlier under the Medium-Income Housing Loan Scheme, has been replaced with ‘Home Sweet Home’ Loan scheme by increasing the loan up to Rs.10 million, the statement said. This loan could be repaid within 25 years and the borrower has to pay only 6% of the interest. The previous 5-year relief on the interest has been extended to 15 years.

According to the statement, under the ‘Sihina Maliga’ loan scheme, implemented to enable Sri Lankans serving in foreign countries to build houses in Sri Lanka and, many such expatriate workers to enter short-term agreements of about two years, it is impossible to grant a maximum loan of Rs 10 million to be paid within a period of 15 years. Therefore, under the new amendment made to the loan scheme, it has been proposed to grant this loan under several stages. The loan will also be granted to purchase housing units from condominiums. This loan will also be granted to build a new house, renovate the existing house, demolish the current house and build a new house, purchase land and put up a house there and purchase an old house and renovate that house, the statement added.

A 5-year grace period has been given for the borrowers of ‘City Ride’ loans to repay their loans and, among them, those who currently own route numbers or others who provide transport facilities for export-based institutions do not require such grace period, the Finance Ministry said.

‘Jaya Isura’ loan scheme is the main product under Enterprise Sri Lanka Loan Scheme which expects to create entrepreneurs and it provides loans for those who are engaged in businesses which are related to Information Technology, innovation and to broaden their existing businesses, according to the Finance Ministry.

The loan amount provided to purchase mini taxies and electronic three-wheelers have been increased by Rs.250, 000.00, the ministry says. This has been amended following the increase in the prices of vehicles and the current maximum loan amount is Rs 2.25 million.

‘Mage Anagathaya’ loan scheme, introduced to facilitate those who fail to enter state universities, allows such persons to pursue their higher education at private universities. A loan of Rs 1.1 million will be provided under this scheme, the Finance Ministry added. The Average Weighted Prime Lending Rate + 2% in this regard has been changed, the ministry’s statement said.

At the same time, if the loan applicant fails to repay such a loan, which was obtained to complete a degree or a course at a private university or an institute, or on the occasions that the applicant reasonably fail to repay the loan, the respective loan amount should be charged from the degree applicant or his or her guarantors, the Finance Ministry emphasized.

If it is failed to charge the loan amount in that manner, the government should pay the outstanding balance of the loan together with its accumulated interest to the relevant bank, the ministry says.

There are a total of 22 relief loan schemes implemented under Enterprise Sri Lanka loan schemes introduced by the government. Among them are 17 loan schemes under relief interest, 3 reimbursable loan schemes and 2 non-monetary programs, according to the Finance Ministry.

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