The Commercial Bank of Ceylon has announced the launch of another Bank-funded loan scheme, this time to assist micro enterprises affected by the COVID-19 pandemic, in a continuing demonstration of the Bank’s commitment in supporting Sri Lanka’s post-pandemic economic recovery.
The second Bank-funded loan scheme launched by the country’s benchmark private sector bank in the past month, the ‘Dirishakthi COVID-19 Support Loan’ scheme is designed to meet the working capital requirements and revive operations of businesses whose annual turnover is below Rs 15 Million, the Bank said. These loans will be provided for a maximum period of 24 months, at an interest rate of 9% per annum.
Commenting on the launch of this loan scheme for micro entrepreneurs, Commercial Bank`s Chief Operating Officer Sanath Manatunge said: “The smallest enterprises were among those worst-affected by the pandemic. With these loans, our intention is to revive businesses at the grass roots level. We hope to help secure livelihoods by giving micro entrepreneurs the much needed support to overcome challenges of post COVID-19.”
Commercial Bank ‘Divisaru’ Savings Account holders who are micro and small entrepreneurs engaged in any form of livelihood activity and who have not defaulted on payments in any other financial institutions prior to March 25, 2020 will be eligible to borrow under the ‘Dirishakthi’ Loan Scheme. Furthermore, individuals and registered businesses too can apply for this loan to revive their operations.
Priority status for obtaining a ‘Dirishakthi COVID-19 Support Loan’ will be offered to the Bank’s existing micro finance borrowers with a good track record, women connected to micro businesses, and micro borrowers who were not eligible for any other scheme of financial assistance, the Bank said. The scheme will be implemented under the purview of the Bank’s 16 Agriculture & Micro Finance Units (AMFUs) which play a key role in helping the Bank to identify specific needs of entrepreneurs who require assistance to develop either their agriculture activities or micro businesses. The AMFU will monitor and ensure that the funds received by these micro entrepreneurs are put to good use.
Notably, Commercial Bank’s AMFUs have supported awareness programmes and conducted vocational training, financial literacy programmes and workshops for micro-entrepreneurs in different sectors of business in many areas of the country for many years.
Commercial Bank recently made a separate commitment of approximately Rs 10 billion to provide loans to SMEs affected by COVID-19, after it obtained a loan of US$ 50 million from the IFC. These Bank-funded loans are also provided to those who missed out on the benefits of the CBSL supported ‘Saubhagya Covid-19 Renaissance Facility.’
The Commercial Bank of Ceylon, one of the largest lenders to the SME sector has been offering financial support services to businesses in order to soften the blow of the economic effects that COVID-19 has imposed.
In May, the Bank announced a reduction of lending rates across the board for new loans, leases, pawning and overdraft facilities.
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