Central Bank extends grace period of 4% working capital loans by three months

• CB sees most borrowers incapable to revamp biz due to pandemic’s second wave 
• Move aimed at encouraging borrowers to repay loans without failure

The Central Bank yesterday said the six-month grace period extended for 4 percent working capital loan scheme would be extended to nine months in light that most of the borrowers have experienced difficulties in revamping their businesses as expected due to the second wave of the COVID-19 pandemic.

Having identified the national importance of revamping the businesses affected by COVID-19 pandemic, the Central Bank in consultation with the government implemented Saubagya COVID-19 Renaissance Loan Scheme Facility in 3 phases to provide working capital loans at the interest rate of 4 percent per annum, with a repayment period of 24-months, including a grace period of 6-months.

“However, it is observed that most of the borrowers have experienced difficulties in revamping their businesses as expected, due to the second wave of COVID-19 pandemic. 

Therefore, having considered the importance of facilitating and encouraging borrowers to repay the loans without any failure, the CBSL decided to extend the grace period applicable for the loans registered under Saubagya COVID-19 Renaissance Facility by additional three months, upon the written request made by the borrowers,” a Central Bank statement said.

Accordingly, beneficiaries of these working capital schemes who wish to receive a grace period of nine months are required to send a written request to the relevant bank.