The new government has charged that loan disbursements under now suspended ‘Enterprise Sri Lanka’ loan programme that offered concessionary interest rates, was politically motivated and said is subject to a full review.
“Even though you initially go through the banking system, finally the political authority had got involved. All of us as taxpayers have contributed to these subsidised loan schemes, hence limiting that to a particular political party was not reasonable,” State Minister of Development Banking and Loan Schemes, Shehan Semasinghe charged.
The Enterprise Sri Lanka loan scheme was launched in 2018 by the previous government aiming to create 100,000 entrepreneurs in Sri Lanka by 2020.
The programme offered loan facilities ranging from Rs. 100,000 up to Rs.750 million for prospective entrepreneurs, which included interest-free and interest-subsidized loans under 15 tailor-made local and donor-funded financial and non-financial schemes.
As of last September, capital loans worth Rs.93 billion had been disbursed among 58,000 entrepreneurs.
The new government immediately suspended the loan programme after coming into power last November.
State Minister Semasinghe casts doubts on how many of those borrowers could be considered as genuine entrepreneurs.
“Since these loans schemes were at extremely low interest rates, the repayment percentage was very high with only 1-2 percent gone into NPLs. Therefore, anybody who had obtained other loans also converted repayment under these subsidised loan schemes.
We want to find out how much of these loans were disbursed to genuine entrepreneurs, because we all doubt that this was just a politically motivated programme,” he elaborated.
Semasinghe stressed that the government will conduct a full review on the programme including its contribution to the economy. (NF)