New division at Finance Ministry to coordinate ‘Enterprise Sri Lanka’
„Finance Ministry says certain banks hindering ESL implementation „EX-BOC official appointed to head new division
The government has setup an Enterprise Sri Lanka (ESL) division at the Finance and Mass Media Ministry, as the disbursement of loans under ESL loan schemes has fallen short of targets due to unruly practices of certain banks.
“The success of ESL fell short of our expectations during first four months of the programme. I don’t want to blame banks. However, as usual, the banks were discouraging entrepreneurs who were trying to access this loan scheme,” Finance and Mass Media Minister Mangala Samaraweera said.
He was speaking at the launch ceremony of ESL and Gamperaliya programme for this year held at Temple Trees on Saturday.
Samaraweera established the new division at his ministry last Friday after securing Cabinet approval earlier last week. A former retired senior banker from Bank of Ceylon (BOC) has been appointed as CEO to head the division.
The Secretary to the Treasury and Ministry of Finance and Mass Media, Dr. R.H. S. Samaratunga said the new division would coordinate all activities of ESL programme to ensure smooth implementation of the programme by banks.
“There are always problems between the applicants and banks, and we need to iron them out. Sometimes, the instructions are not clear, hence we need to clarify them,” he said.
Samaraweera charged that several banks were discouraging ordinary people who didn’t have guarantors, while there were
also reports that some banks were encouraging their existing customers to move into subsidised ESL loan schemes from high interest loan schemes.
million to pay as interest to bank through which these loans are channelled. The treasury has been authorized by the Cabinet to enter into agreements with State and private banks to extend the loan scheme.
According to Samaraweera, self-employed female entrepreneurs and small and medium entrepreneurs have so far registered for various loan schemes totalling up to Rs.65 billion via State and private banks, and loans worth Rs.36 billion have already been disbursed to over 34,500 people.
The government plans to groom 100,000 entrepreneurs by 2020 through implementation of ESL programme.
“Some banks are extending ESL loan schemes to their existing customers. The bankers are encouraging their existing customers to move from pre-existing loan schemes with ESL loan schemes as the interest cost is substantially low. We are not ready to bear the interest cost for these high net worth individuals. The bankers should know to whom to extend these loan schemes in order to serve the purpose of the ESL programme,” he elaborated.
Samaraweera reiterated that the banks need to ensure that cash-stripped ordinary citizen have access to the ESL loan schemes without having to provide guarantors.
He also instructed the management of banks to take strict action against their employees who are discouraging ordinary citizens from obtaining ESL loans.
Samaraweera is scheduled to meet CEOS of leading banks to further discuss the matter this week.
He noted that ESL has been enhanced with several new loans including Rs.10 million with 75 percent interest concession to construct elderly homes and pre-school centres as well as Rs.2 million loan scheme for threewheeler owners to purchase small cars replacing their three-wheelers.
However, he acknowledged that there are some issues with certain loan schemes such as the Rs.10 million home-stay loan scheme, which is implemented by banks and Sri Lanka Tourism Development Authority (SLTDA). He said that these issues will be sorted out shortly.
The Cabinet last week approved to allocate Rs.700