President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa - who is also the Minister of Finance - have issued directives to chairmen and CEOs of all banks to suspend the recovery of loans obtained by the small-medium enterprise (SME) sector up to Rs 300 million.
The Finance Ministry said in a statement that the government had taken a decision to take up a new initiative to revive SMEs of which outstanding debt not exceeding Rs 300 million in each entity since recently announced tax reform initiatives provide substantial savings to all banks including the Central Bank of Sri Lanka.
The government expects the banks to use part of such savings to revive the SME sector on a priority basis.
The directives from the President and the Prime Minister also incorporates redresses to small and medium scale paddy millers as well since the government expect them to re-energise their milling operation to improve the competitiveness in the market and expects their capacities to be active in 2019/20 Maha season
This concessionary action will be followed by a comprehensive package coupled with already announced tax concessions designed by the Ministry of Finance, Economy and Policy Development and the Central Bank of Sri Lanka, which will support both the lender and the borrowers - especially the SME sector.