Govt to waive off small-scale paddy farmers’ loans obtained from state banks

President Ranil Wickremesinghe says that the outstanding loans obtained by small-scale paddy farmers from state-owned banks will be waived off, excluding interest.

Accordingly, the outstanding loan amounting to Rs. 688 million, currently in default to the state-owned banks, will be written off for a total of 28,259 farmers who own less than 2 hectares of cultivation land and are in repayment arrears of cultivation loans given by the state-owned banks as of May 31, 2022.

The decision was reached, taking into account the decrease in harvest, lack of fertilizers, agrochemicals and inputs, and abandonment of cultivation.

Presenting the Interim Budget 2022 in parliament, the president mentioned that the amount to be waived off will be back to respective banks in two years in a phased manner in order not to put added pressure on the cash flow of the General Treasury.

“Accordingly, the respective banks should arrange to write off the interest 15 relating to such loans. I propose to allocate Rs. 350 million for the implementation of this proposal,” President Wickremesinghe said further.