Sri Lanka Central Bank establishes 3 billion rupee loan scheme to small businesses in North

In an effort to uplift the livelihoods of the people in the war-ravaged North, Sri Lanka's Central Bank has established a special loan scheme to benefit the small and medium scale businesses in the region.

Under the special loan scheme, called "Vadakkin Vasantham" (Northern Revival) the Bank has set aside 3 billion rupees to be disbursed to the eligible micro, small and medium scale enterprises, through several Participating Financial Institutions (PFIs).

The loans are given at a concessionary interest rate of 9% per year with a repayment period that could extend up to 5 years with a grace period of 6 months.

The Governor of Central Banks Ajith Nivard Cabraal said the PFIs have already received over 9,000 applications of loans amounting to Rs. 1.8 billion and over a billion rupees had already been disbursed.

The Northern region devastated by the decades-long conflict is seeing a economic revival with the opening of the A-9 highway, the main land route that connects the northern Jaffna peninsula with the southern main land.

The Governor said the economic opportunities in the North are expanding day by day, and the Central Bank is also planning to set up a regional office in Jaffna.

The Central Bank has approved over 90 banking outlets in the region within the past 8 months. Hong Kong and Shanghai Bank (HSBC) was the first foreign bank to open a branch. It opened its first branch last Thursday in Jaffna.