Finance and Mass Media Minister Mangala Samaraweera said that the “Enterprise Sri Lanka” programme, one of the main proposals made in the budget to create entrepreneurs would be launched in March.
He further said that those who obtain credit facilities would be given interest subsidy upto 75% of the effective interest rate.
The government expects to disburse Rs 60,000 million through state and private banks to would be entrepreneurs and another Rs 5000 million has been set aside by the Treasury to reimburse the interest subsidy to the banks.
Under this scheme 15 different loan schemes have been proposed for young entrepreneurs in the fields of Agro, fishery industries and for small and medium enterprises.
This scheme includes journalists and those who are self employed as well.
In addition to young entrepreneurs, women and differently abled persons will also be provided special opportunity to take part in this programme. Women and differently abled persons who come forward to take part in this programme will be offered additional interests subsidy of 10% and 15% more respectively. The women will have to form a company at least with ten equity share holders and each share holder will have invested at least Rs 10,000. The government will extent a comprehensive support package which includes both non-financial and financial assistance including grants and the credit through the enterprise Sri Lanka credit schemes to these companies.
Minister Samaraweera held a discussion yesterday with the Heads and the Chief Executives Officers of the State and Private Banks at the Treasury.
State Finance Minister Eran Wickramaratne and senior ministry officials also participated at this discussion.
Minister Samaraweera called upon all the banks to extend their fullest support to implement this programme in order to create jobs through the expansion of economy while aiming to expand exports.
“The government expects the SME sector to be the backbone of the economy. However, the lack of capital or the difficulty in accessing capital due to both the cost of capital and the requirement for collateral have been the main impediments in the development of start ups of the SMEs,” the Minister said.
However the minister stated that our objective is to ensure that no entrepreneur is ever denied credit due to the lack of collateral, but is able to access financing given viability of the project proposals.
The President, Prime Minister and the private banks assured the minister of their continuous support to this project to realize the governments objectives of creating one million new jobs, increase the per capita income and the expansion of exports through enterprise Sri Lanka programme.
When entering the field to expand the small and medium scale business sector including self employment, the Minister informed the bank officers that the Government will not allow the banks to repay the loans, because of the impossibility of bailing to obtain the capital costs and loans.
As the Treasury has decided to handover the bails which are expected by the banks from businessman, hereafter by considering only the feasibility of the project proposal the Government has decided to issue a Treasury bail for the debtors to give loans on concessional interest basis.
With the aim of obtaining female participation in the field of business and industry, the women who join the “Enterprise Sri Lanka” programme will be given an interest relief of 10% in addition to 75% interest relief when granting a loan and 15% extra (surplus) interest relief for the specially skilled individuals with a Treasury bail will be provided by the Government as decided.
The Government will provide non financial technical facilities for the companies which women have a greater entitlement, including at least 10 participants that start up with a minimum capital of Rs. 10,000 from each share holder.
The Government will hold 75% of the leasing cost of the machineries get under the leasing method by such companies and the the Treasury will issue the required bail for the relevant banks.
With the objective to create one million new jobs and to encourage the export by increasing per capita income, the Chief Executives of all the State and Private Banks had promised Minister Samaraweera of their fullest support to the “Government Enterprise Sri Lanka” programme.