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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) recently.

According to the MoU ten thousand affected enterprises will be rehabilitated and employment will be generated for fifty thousand within three years.

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).

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