To boost SMEs in North and East:

Concessional credit from government

by Gamini WARUSHAMANA

Government has launched three new concessional credit schemes for livelihood improvement projects of the war affected people, rehabilitation of affected industries and reconstruction of damaged houses, the Chairman of the Rehabilitation Authority E.A. Samarasinghe told the Sunday Observer.

Under these loan schemes that are jointly implemented by the Rehabilitation Authority and Bank of Ceylon (BoC) we issue loans for self employment ventures in agriculture, fishing, animal husbandry and any viable small scale industries or services.

The maximum loan amount is Rs.250,000 and the repayment period is 10 years with a one year grace period. This is a concessionary loan with four percent annual interest. The government has given Rs.100 million to the BoC to start the loan schemes, he said.

Families that are economically affected during the war are eligible to apply for this loan. Accordingly anyone who is capable of starting a self employment venture in families where the bread winner is dead, missing or disabled during the war can apply for a loan.

Samarasinghe said that there is a significant demand for this loan and especially youth have shown interest.

Already 8,000 applications have been issued through the Divisional Secretaries and over 1,000 have applied for loans. Last week BoC and the Rehabilitation Authority has selected 150 applicants in Karachi DS division in the Kilinochchi district after evaluation of their project proposals.

Continued from page 65

There are ex LTTE combatants who have been released after rehabilitation, among the applicants. Most of them have received skills development training during the rehabilitation period and therefore they will be able to start successful self employment ventures, he said.

Housing loans

The housing lone scheme is targeted at reconstructing partly damaged houses in the region. There is a large number of houses in the Kilinochchi and Mullaitivu districts where only the roof has been damaged.

These people can immediately resettle in their previous permanent houses if we help them with repair. Government has decided to allocate 25 percent of these loans for government servants in the region. The maximum loan amount offered is Rs. 250,000 and interest and repayment periods are the same.

Samarasinghe said that the Industrial Rehabilitation loan scheme has been designed to help medium scale industries that prevailed in the region before the conflict to restart their operations.

Registered industry owners can apply for this loan.

Under this loan scheme we offer a maximum of five million rupees at nine percent interest with a 10 year repayment period and one year grace period.

The first loan under this scheme will be offered to recommence an aluminium goods manufacturing factory in Thellapellai in the Jaffna district. The factory will be started with new machinery imported from India and this factory will provide employment to 76 persons. Economic activities in the North and East provinces are bouncing back to normal. Sectors such as agriculture and fisheries have commenced even without external support. However, the industrial and service sectors need external support to rise from the ashes.

Lack of finance is a major obstacle.

Also lack of market information, and the knowledge on the new age businesses in Sri Lanka has to be addressed. These regions are around three decades behind the rest of the country.

For instance one rehabilitated LTTE combatant had applied for a loan to purchase a sewing machine requesting Rs. 250,000. At evaluation we realised that she did not know the price of a sewing machine. She had thought that it would be over Rs.200,000. Therefore under this loan scheme the BOC and Rehabilitation Authority conduct awareness programs for the beneficiaries.

The positive side is the common sense the young people show on the goods and services demanded by the rebuilding economy in the region. One youth had applied for Rs.250,000 to start self employment.

His project is to open up a cinema hall and he needed money to construct a hut and purchase a computer and a projector. He thinks that there will be a huge demand for films especially Indian films. All cinema halls in this region have been destroyed.

It was a viable business and also a positive sign of the improving social condition of the people, Samarasinghe said.