- COSMI welcomes critical life support to MSMEs
- ‘MSMEs are still slow to come back’-Rajabdeen
Sri Lankan MSMEs have welcomed the decision of the new government led by Prime Minister Mahinda Rajapaksa to extend the bidding deadline for loan infusion. “Due to the lockdowns, MSMEs faced collapse. We welcome the government’s life support to MSMEs by giving working capital loans at 4% interest. However, logistic disruptions, many MSMEs were unable to join this scheme.
We thank the new government for realizing their plight and extending the Saubagya deadline which is a critical relief by itself” said the President of Sri Lanka’s Confederation of Micro, Small and Medium Industries (COSMI) Nawaz Rajabdeen on August 25.
“The supply chains and cash-flows of MSMEs have been severely disrupted by COVID19 lockdowns. After lockdowns, MSMEs in sectors such as apparel, processed foods, and handlooms are making a slow comeback while MSMEs in other sectors such as tourism and footwear and leather may take more time. Therefore we praise this Central Bank for extending the application deadlines for 4% working capital loan relief” Rajabdeen said.
The loans, to be granted under the Saubhagya (Prosperity) Loan Scheme as a ‘Saubhagya COVID 19 Renaissance Facility’ will be made available to MSMEs in manufacturing, services, agriculture, construction, self-employment businesses and individuals and the businesses in the sectors of tourism, exports and related logistics suppliers. Financial institutions are to grant a working capital loan facility to eligible performing and non-performing borrowers not exceeding two months’ working capital requirement and to be repaid over two years at an interest rate equal to 4% p.a.
“The Monetary Board decided to extend the deadline of 4% Working Capital Loan Scheme, at its meeting, held on 19th August 2020. Accordingly, COVID-19 affected businesses and individuals can submit their loan applications under the Saubagya COVID-19 renaissance facility to respective licensed banks until 30th September 2020” the Central Bank announced on August 21.
The Confederation of Micro, Small and Medium Industries (COSMI) was formed in 2019, and aims to revive and foster the MSME and industry sectors of Sri Lanka.