Deadline for application of loans under Saubhagya scheme extended to September 30

• CB by August 18 had approved cumulative loans worth Rs.100bn
• Licensed banks have already disbursed Rs.68.5bn among 25, 365 affected biz and individuals
• CB to introduce housing loan scheme; FinMin to introduce new refinance scheme 

The Central Bank has extended the application deadline for loans under the Saubhagya refinance facility to provide concessionary working capital loans to those affected by the pandemic, from August 31 to September 30, as the scheme has more funds to run its full course. 

The Monetary Board launched the Saubhagya COVID-19 renaissance facility in late March with a fund allocation of Rs.50 billion to provide liquidity to banks at 1 percent who can then loan those funds at 4 percent for two years to those borrowers whose business and incomes were affected by the pandemic. 

But later in June, the funds under the scheme were tripled to Rs.150 billion. By August 18, the Central Bank had approved cumulative loans worth Rs.100 billion, submitted via 36,489 applications.

In the early days of the scheme’s introduction, there was some delay in approving the loans but the process gathered pace from mid-June as President Gotabaya Rajapaksa chided the Central Bank officials for perceived inadequacy towards supporting the economy damaged by the pandemic.

Meanwhile, out of the Rs.100 billion loans approved, licensed banks have already disbursed more than Rs.68.5 billion among 25, 365 affected businesses and individuals, the Central Bank said providing a bank-wise breakdown of the 
loan disbursement. 

The private sector banking giant, Commercial Bank led the pack with Rs.16.3 billion in disbursed loans across 3,801 applicants, followed by the State banking giant, Bank of Ceylon disbursing Rs.14.7 billion loans representing 6,389 applicants. 

Hatton National Bank and People’s Bank granted Rs.7.1 billion and Rs.6.4 billion in loans respectively, requested via 1,796 and 4,860 applications. 

The economic sector-wise classification of loans showed that 50 percent of loans approved have been to the services sector, led by the trade services sub-sector.

 The balance half been shared between the industry and agricultural sector at 34 percent and 16 percent respectively.

Further, the Central Bank last week said it was looking at launching a housing loan scheme targeting low and middle income groups as it is trying to support priority areas of the economy identified by the government policy unveiled last week,  by way of facilitating access to finance by initiating appropriate credit and other programmes. 

Meanwhile, as the refinance scheme targeted at small businesses is approaching its final leg, the Finance Ministry, under its Department of Development Finance is expected to launch a new refinance scheme targeting micro and SMEs called the ‘Emergency Response Facility’. 

The scheme which will be in the size of rupees equivalent to US$ 100 million will provide loans up to Rs.10 million for eligible borrowers at rates up to 6 percent for 3 years under a funding line scheduled to be received from the Asian Development Bank.