Rs 15B for concessionary loans to target sectors

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By 2017-11-15

The Budget-2018, themed 'Enterprise Sri Lanka', will create a credit scheme with the allocation of Rs 15 billion, enabling small businesses in target sectors to borrow loans at the rate of 6.5%, and in some cases 3.3%, to fund modernization and expansion of enterprises in the country, said Minister of Finance and Mass Media Mangala Samaraweera, according to a press release.
The Minister, addressing a post-budget forum in Colombo, said that today one of the biggest barriers to starting a business was the cost of capital. Many young entrepreneurs and SMEs have innovative business ideas but they find it difficult to make these viable at the prevailing interest rates of 15% and above, added the release.

Samaraweera also said that, in parallel, an SME guarantee fund is also being set up to enable SMEs with sound business plans to access credit without collateral. A Development Bank with an Exim window will provide development capital in the form of long-term loans, project lending, and startup financing.

"These new initiatives will change the entire landscape of Sri Lankan enterprise," said Samaraweera. Referring to various suggestions made by different sectors of the economy on...the Budget, the minister said that he was willing to listen to suggestions where there may be mistakes to correct. However, the main themes of the budget – Enterprise Sri Lanka and liberalization – would be non-negotiable, stressed the minister.
The minister emphasized that citizens, especially the youth of the country, would be empowered to take their future into their own hands. "Starting with this Budget, we want to unlock the barriers to investment, trade, and enterprise," he said. "Access to land, labour, and affordable capital are the major impediments to the creation of new businesses and to expand existing ones."
A series of legislative changes will be implemented to address the difficulties in access to these factors of production. Archaic laws such as the Agricultural Lands Act and the Shop & Office Employees Act will be modernized to provide more flexibility to the market.
Samaraweera detailed the reasoning that led to the Enterprise-Sri Lanka Budget. "Today, only 10% of around 300,000 Advanced Level students find a place in State Universities each year. For too long, we have devoted all our energies only to this 10%. In this Budget, we have focused on harnessing the talents of those who are left behind and creating opportunities for them.

The 13 years of education policy recognizes the varied skill of students and ensures the opportunity for students to stay in school after Ordinary Levels. Students can take up market-oriented skill development programmes, including digital skills, creative skills, and technical skills."

"We are working with the German and Swiss governments to expand the German Technical schools, with 5 new schools around Sri Lanka. The skill development programmes will be conducted in close collaboration with the private sector to ensure their relevance."
Samaraweera concluded by expressing his confidence that all efforts through his maiden budget would position Sri Lanka on a high, sustainable, and inclusive growth path, leading to a prosperous nation in the near future. He also called upon the business community and all other stakeholders to extend their support to ensure that this budget worked for the benefit of all Sri Lankans, concluded the release.

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