SME Bank loans to help handloom producers
A special loan scheme, Kantha Diriya for handloom producers will be
implemented by the SME Bank shortly.
This loan scheme was designed by the SME Bank for the uplift of the
SME sector. The uplift of the handloom industry has been envisaged by
Mahinda Chinthanaya and the Budget 2006.
The handloom industry in the country has undergone a difficult period
since the late 1970s due to the stiff competition from those imported
and the inability of the industry to keep pace with the demanded quality
and to improve productivity for maintaining competitive prices.
Most of the producers who thrived during the era of protection found
it difficult to continue and closed their production units.
These skilled people became unemployed and their machines remained
idle and any capital that was left was transferred to other activities.
The few who were able to sustain improved their quality and supplied
their products to the niche markets. Fashions have changed over time and
there is a tendency to revert to handloom clothes.
The Kantha Diriya loan scheme will be implemented in collaboration
with the Ministry of Textile Industry. At the preliminary stage 125
handloom producers all over the island will benefit.
The producers will have to expand their capacity with investments in
technological improvements leading to reduced costs and improved
productivity and quality.
The SME Bank which comes under the Ministry of Enterprise Development
and Investment Promotion was set up last year to assist the SME sector
in Sri Lanka.
Customers have commended the speedy procedures and approvals and
reasonable low interest rates when compared with other banks.
The SME Bank took urgent measures granting on the spot loans on easy
terms to businessmen who were displaced by the recent attacks in
Trincomalee under the "Back to Business" policy of the bank.
An MoU to grant credit facilities for Micro, small and medium
entrepreneurs in tsunami affected areas was signed by the SME Bank and
the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL)
According to the MoU ten thousand affected enterprises will be
rehabilitated and employment will be generated for fifty thousand within
The tsunami affected entrepreneurs can obtain loans up to one million
rupees under concessionary interest rates. The repayment period must not
exceed thirty six months with the provision to increase on a case by
case basis to a maximum of sixty months.
The SME Bank operates on 'SME Window' network for the convenience of
SME entrepreneurs with the National Savings Bank (NSB).