Maximum borrowing limit on microfinance loans increased

Tuesday, 3 March 2020 00:00 - - {{hitsCtrl.values.hits}}

Finance Ministry says loans seek to relieve debt burden

By Shailendree Wickrama Adittiya

The maximum borrowing limit on low-interest loans, introduced in an effort to relieve the burden on individuals adversely affected by microfinance loans, has been increased from Rs. 40,000 to Rs. 60,000.

State Minister of Development Banking and Loan Schemes Shehan Semasinghe

- Pic by Lasantha Kumara

Finance, Economy and Policy Development Ministry yesterday, this will require a fund allocation of Rs. 292 million to the Northern Province and Rs. 250 million to the North Central Province. A total of 14,000 people in the North Central Province are affected by microfinance loans but only 227 qualified for the Rs. 40,000 low interest loan scheme. This meant that of the Rs. 250 million allocated to these individuals, only Rs. 9.76 million was made use of.

However, with an increase in the maximum limit, a larger number of people can benefit from the scheme. In addition to this, annual interest is to be reduced to 9% from the current 14%.

Semasinghe added that the Government, while taking strategic measures to revive the economy, was also intent on providing the public with the necessary knowledge to manage its income, business ventures and economic contributions.

In response to questions on ETI Finance and The Finance Company, Semasinghe said: “As a Government, we are currently holding discussions with various parties, including The Finance Company, to look at ways to provide solutions to these issues. We can’t say for certain what measures will be taken but our focus has been drawn to it.”