Govt. writes off loans of 45,000 women borrowers in drought-affected districts

Saturday, 16 February 2019 00:10 - - {{hitsCtrl.values.hits}}

The Government has written off nearly Rs. 1.4 billion in capital and interest of loans of 45,000 women borrowers in drought-affected districts whose capital cost is less than Rs. 100,000.

This relief was granted under the Enterprise Sri Lanka Loan scheme with concessionary interest rates instead of high-interest microfinance loans.

The national ceremony to grant relief to 45,000 women who were affected by the drought and the issuance of certificates on write-offs was held at the Veerasingham Hall in Jaffna on Thursday under the patronage of Prime Minister Ranil Wickremesinghe and Finance Minister Mangala Samaraweera.

Around 300 women in Kilinochchi and Jaffna Districts were awarded with certificates of repayment of microfinance loans.

Addressing the gathering, Minister Samaraweera requested the people to obtain loans in full or partially from the Government under the Enterprise Sri Lanka program at concessionary rates instead of paying 200% interest to microfinance institutions. It will be vital to the people of the north, he added.

The Minister, pointing out the need for new legislations to regulate microfinance institutions, said that the new Microfinance Act was being prepared.

He said the write-off of loans obtained from microfinance institutions is only a short-term solution and new laws are needed for a long-term solution.

“Cutting off loans for women at high interest rates is only a short-term solution to the problem. New rules should be introduced for a long-term solution. In the early part of the year, the Government capped these interest rates of microfinance institutions at a maximum of 35%.”

“Enterprise Sri Lanka low-interest loan scheme is a successful solution. Small entrepreneurs, farmers, university students and all other stakeholders can get these loans. This program with over 20 loan schemes was introduced for your benefit. The loans range from Rs. 300,000 to Rs. 750 million. Interest rates vary from 0% to 7%. However, the Government has to pay the balance of the interest that you would not pay to the relevant bank on behalf of you. We will also give women borrowers an additional 10% interest subsidy,” the Minister explained. Ministers Rajitha Senaratne, Arjuna Ranatunga, Akila Viraj Kariyawasam, Rishad Bathiudeen, State Minister Vijayakala Maheswaran, MPs M. A. Sumanthiran, Mavai Senathirajah, and officials of the Treasury were among the large gathering present.