HNB launches Rs.5bn SME relief fund to support post-COVID recovery

• Working capital loans offered at concessionary interest of 8% p.a. for a period of upto 2 years
• Enables working capital support for SMEs not captured under CBSL’s Saubagya scheme
• Loan scheme initiated solely utilising internally generated funds

In an effort to finance a grassroots revival of the Sri Lankan economy in the wake of the COVID-19 pandemic, HNB PLC has announced the launch of a Rs.5 billion relief fund, which will be used to provide working capital support to the bank’s sizeable portfolio of Small and Medium Enterprise (SME) customers.

“Following on the action taken by government and public health officials to curtail the spread of COVID-19 in Sri Lanka, a new sense of normalcy is gradually being restored. Moving forward, our next major challenge is to similarly contain the damage inflicted on the health of our nation’s economy from nearly three months of relative stagnation. HNB is fully committed to partner with all stakeholders in this endeavour,” HNB Managing Director/CEO, Jonathan Alles stated.

The HNB COVID recovery fund will be leveraged to bolster assistance to the SME sector by complementing the Central Bank of Sri Lanka (CBSL) supported Saubagya Covid -19 Refinance Loan Scheme.

Hence, applicants who are unable to secure government funded loans at 4 percent p.a. will be given the option of securing a working capital loan via the HNB COVID relief fund at a concessionary interest rate of just 8 percent p.a. for a maximum period of 24 months.

In this manner, HNB aims to utilise its own internally generated funds to support government objectives of ensuring that as many viable SMEs are given priority access to funding to support them through the disruptions caused by the COVID pandemic.

“Given our pioneering role and vast client network in the SME space, HNB is ideally positioned to assist this vital sector – which collectively accounts for nearly half of all employment in Sri Lanka. Many of these businesses are facing extremely constrained cash flows, but with the right support, they still have the potential to recover and eventually thrive.

“As a bank we understand that these are difficult times, and so we are doing everything we can to be flexible with repayments and assist customers in any way we can to get through this uncertain and volatile period. We remain confident that the launch of this fund, which operates independently from the Saubagya COVID loan scheme, will help catalyse an organic grassroots revitalisation of the Sri Lankan economy in the months to come,” HNB DGM - Retail and SME Banking, Sanjay Wijemanne, explained.

At present, HNB has facilitated over 2,500 clients to apply for the relief under the CBSL Saubagya working capital loan scheme, in addition to providing over 75,000 individuals and enterprises with debt moratoriums.