Thursday Nov 14, 2024
Thursday Nov 14, 2024
Wednesday, 24 October 2018 00:00 - - {{hitsCtrl.values.hits}}
By Uditha Jayasinghe
The Government’s attempt to promote entrepreneurship has resulted in the disbursement of Rs. 58 billion in Enterprise Sri Lanka loans to nearly 30,000 people, Finance Minister Mangala Samaraweera said yesterday, with plans to increase allocations for the program in Budget 2019.
Since Enterprise Sri Lanka was launched in June there has been a significant increase in loans extended to entrepreneurs, with Hambantota leading the beneficiaries list with 4,842 recipients, Colombo 2,789, Kandy 1,476, Matale 1,048, Ampara 1,299 and Kurunegala 1,471. The North fared worse than the rest of the country with Jaffna (497), Kilinochchi (69), Mannar (169) and Vavuniya (106). Trincomalee (510) and Batticaloa (912) were also among the lowest. Samaraweera acknowledged that additional efforts would be made to encourage people, especially youth in the North and East, to use Enterprise Sri Lanka loans to start businesses, acknowledging that as this was a region still recovering from the conflict there was a greater need for gainful employment.
He also conceded that loans should be funnelled towards creating tradable goods rather than purchasing vehicles and other similar expenditure that increases consumption but does little to boost exports.
Loans to operate homestays, produce environmentally sustainable products and introduce new agriculture products were among the most popular loans under Enterprise Sri Lanka, the Minister said.
“We will work to increase the scope of Enterprise Sri Lanka in Budget 2019,” he said.
Bank of Ceylon had disbursed the largest share of loans totalling more than Rs. 17 billion with Commercial Bank coming in second with Rs. 12.5 billion. People’s Bank had disbursed Rs. 3.6 billion while the Regional Development Bank (RDB) had disbursed Rs. 5.9 billion. Hatton National Bank disbursed Rs. 6.8 billion, Seylan Bank Rs. 1.3 billion and Sampath Bank Rs. 5.5 billion.
“Even though we started out with State banks, 18 other banks have joined Enterprise Sri Lanka. Many of them have established separate windows for Enterprise Sri Lanka and have been very supportive of our efforts. But we have also received complaints that there have been instances when eligible candidates have been turned away or false conditions have been placed when giving the loans. This is why we are launching a hotline with the number 1925 today, so that anyone who has attempted to get a loan and has not been able to do so or has faced some other problem can make a complaint on this line. A copy of each complaint will also be sent to the Finance Ministry, which will help us understand what changes to make going forward,” he told reporters.
The Finance Ministry had attempted to obtain the number 2025, which would link the hotline to the Government’s V2025 policy program but had been unable to get the digits due to technical reasons. As a compromise, the Ministry had settled on 1925, Samaraweera said.
“We remain committed to the effort to create 100,000 new entrepreneurs in one year of this program.”
The Finance Ministry is also in the midst of rolling out its microfinance relief program, with 45,139 women selected from 12 districts so far. The Minister said Rs. 1.25 billion in asset liabilities and Rs. 141 million in loans would be written off for 37 microfinance organisations.
“Once we finalise the details we will be posting a voucher to each of the recipients confirming that their loans have been settled.”
Under the program only loans up to Rs. 100,000 will be written off by the Government and in the case of multiple loans the Government will select one loan.
Responding to questions on the depreciating rupee, the Minister recalled that in 2012 the Government of former president Mahinda Rajapaksa had spent $ 4 billion defending the currency but had failed to avert a 14% depreciation.
“I’m not willing to waste Sri Lanka’s reserves defending the currency. We are managing the depreciation well. As we have said numerous times already, the pressure on the rupee is due to external reasons but just because the currency is depreciating, it does not mean that the economy is on the verge of collapse. This is a falsehood being spread by the opposition. Increased cost of living could be one result but that is being managed with tight monetary policy,” he said.
The Minister also said a decision had been taken to extend the tender application period for the Hyatt and Hilton hotels by two weeks to enable more investors to bid for the projects.
“I’m confident we will get a good response. As many as 88 parties have expressed interest and I believe many international parties will be interested in the two properties,” he said.
