Biz community welcomes Govt’s stimulus measures | Sunday Observer

Biz community welcomes Govt’s stimulus measures

5 April, 2020

Business community representatives hailed the move by the Government and  the Central Bank to step up funding and regulatory measures to stimulate the economy and ensure the smooth flow of the daily needs of the people during the lockdown period.

Commending the efforts taken by the government with the Central Bank to stimulate the economy former Senior Deputy Governor of the Central Bank Dharma Dheerasinghe said long term plans are crucial to tide over the crisis.

National Chamber of Exporters Immediate Past President Ramal Jasinghe while commending the efforts taken by the authorities to support the economy,  said the Chamber is in continuous contact with its members and are in constant discussion with the authorities to articulate and implement the directives of  the President to provide uninterrupted services within the export industry.

 Former director of the Central Bank Vincent Mervyn Fernando said  it will not be easy for the government to support the  SMEs to  keep their nose above water if the  pandemic continues  to have an impact on these companies’ liquidity position for another 3-4 months because the government’s plate is full.

The Central Bank has set up a Rs. 50 billion six-month re-financing facility  to support Covid-19 hit self employment businesses and individuals last week which comprises a debt moratorium (capital and interest) and a working capital loan at the interest rate of 4% per annum. The bank also  implemented Extraordinary Regulatory Measures to facilitate banks to support COVID-19 affected businesses and individuals. 

Among these concessions are debt moratorium (capital and interest) and a working capital loan at the interest rate of 4% p.a. for eligible customers. 

Accordingly  licensed commercial banks, licensed specialised banks, licensed finance companies and specialised leasing companies (hereinafter referred to as Financial Institutions) will be eligible to participate in this re-financing facility to support COVID-19 hit businesses including self-employment businesses and individuals commencing March 25, 2020.

The circular has been issued to supplement the Circular No. 04 of 2020 dated March 24 and sets out the operational guidelines to give effect to the re-financing facility

The eligible businesses/sectors are tourism, direct and indirect export-related businesses including apparel, IT, tea, spices, plantation and related logistic suppliers that have been adversely affected by work disruption and overseas lockdowns resulting from COVID–19. 

Small and Medium Enterprises (SMEs) include those in business sectors such as manufacturing, services, agriculture (including processing), construction, value addition and trading businesses including authorised domestic pharmaceutical suppliers with turnover below Rs. 1 bn. 

Self-employment businesses and individuals who have lost their jobs or income due to the outbreak of COVID-19.  Foreign currency earners (individuals and corporates) who have to repay loans in foreign currency and whose incomes/ businesses have been adversely affected due to the outbreak of COVID-19.  For the avoidance of doubt, import facilities shall not be permitted under this re-finance facility, for imports other than pharmaceutical drugs, medical equipment, food, fertilizer and essential raw materials and machinery and equipment.Credit facilities to be supported under this Financing Scheme shall be term loans, leasing facilities, pawning, overdrafts and trade finance facilities denominated in Rupees and foreign currency subject to the requirements specified.