The Bank of Ceylon (BOC) has introduced many loan schemes for small and medium sector entrepreneurs throughout its 80-year journey and more programs will be launched to uplift the SME sector, the backbone of the economy, BOC General Manager Senarath Bandara told an awareness program on ‘Enterprise Sri Lanka’ organised by the BOC and the Sri Lanka Chamber of Small and Medium Industries last week.
He said the SME sector plays a pivotal role in the growth of the country’s economy which makes it all the more important to support the sector which contributes around 70 percent of the GDP.
“Access to finance is a key component in enterprise development but financial discipline and literacy are equally or more important to sustain the growth of enterprises. Many entrepreneurs gain access to funding but they lack the discipline to steer the business in the right direction and making substantial returns on investments. Our aim is to impart financial literacy and help entrepreneurs adhere to financial discipline so that enterprises would thrive,” Bandara said, adding that Sri Lankan entrepreneurs should take a cue from South Korean enterprises which have grown leaps and bounds to become global players.
BOC officials addressing the workshop said many Sri Lankan SME sector entrepreneurs have come a long way to be large scale entrepreneurs catering to global markets and the bank is proud of the achievements.
“We want to see many more small and medium sector enterprises reaching that stature and contributing to the economy. The BOC will always be by the side of entrepreneurs who are enthusiastic and innovative.
The loan scheme under ‘Enterprise Sri Lanka’ promotes new ideas and innovations to build a vibrant export sector in the country,” Bandara said.
The BOC has set up loan centers in the provinces to expedite funding for SMEs at provincial level. Provinces account for around 50 percent of the bank’s total loan portfolio which indicates the business potential in the provinces.
“The bank provides loans after evaluation, understanding and discussion with prospective beneficiaries to ensure loans are used efficiently to maximise returns,” an official of the bank said.
Sri Lanka Chamber of Small and Medium Industries President Rohan de Silva said the Chamber promotes entreprises locally and internationally to develop their ventures and added that the dream of the chamber is to be the largest SME supporting body in the country.
“We hope to see a large number of enterprises becoming beneficiaries of low interest loans schemes offered by BoC to support small and medium enterprises, the live wire of the economy,” de Silva said.
Jaya Isuru, Arambuma, Ran Aswenna, Govi Navoda, Riya Shakthi, SME LoC We-Fi, SME LoC, Diri Saviya, Green Loan, Mini Taxi, Rakawarana and Home Sweet Home are some of the loans schemes introduced under the ‘Enterprise Sri Lanka’ loan program by the government this year to assist enterprises especially those affected by the Easter Sunday attacks.
The ‘Jaya Isuru’ scheme offers loans for agriculture, fisheries, ornamental fish, floriculture businesses, home gardens, light engineering, printing, tourism, handicraft, textile, IT, manufacturing industries and renewable energy sectors under two categories. To be eligible for loans under the first category enterprises need to have an annual turnover between Rs. 10- 250 million and the number of employees should be between five and 50.
The maximum value of loans to enterprises targeting the local market is Rs. 50 million and those catering to the international market is Rs. 100 million at an annual interest rate of 6.93 percent with a repayment period of seven years.
Beneficiaries under the second category should be enterprises with an annual turnover between Rs. 250-750 million and the number of employees should be between 51-300.
The maximum value of the loan for enterprises catering to the local market is Rs. 200 million and those for international markets is Rs. 400 million with an annual interest rate of 10.40 percent and a repayment period of seven years.
Loans will be granted up to the value of Rs. 1.5 million to graduates who aspire to start an enterprise or graduates who have been running an enterprise for five years at a zero interest rate with a seven year-repayment and two-year grace period.