Incentive packages to attract more foreign remittances

The government is mulling to attract and retain more foreign exchange in Sri Lanka by offering special incentive packages for Sri Lankans working overseas, Trade Minister Bandula Gunawardena told the Business Times.

He noted that these Sri Lankans will be encouraged to deposit their savings and other funds in foreign currency to the country’s banking system via this incentive packages.

One such strategy was to offer loan facility in rupees to purchase a land to build a house, educate their children, or to start a business after maintaining a fixed deposit for at least for one year.

Minister Gunawardena disclosed that he has already submitted this proposal specially targeting the Sri Lankans working in West Asia to the Finance Ministry as it will help to fulfill their aspiration of owning a house within a short period.

This loan facility of Rs. 2.5 million could be obtained by depositing a minimum of US$100 per month in a fixed deposit of a bank for a period of one year and their savings per year amounting to $1200.

Such persons will be given a loan facility of Rs. 2.5 million payable in 10 years at an interest rate of 6 per cent. The monthly installment is around Rs. 33333 which is affordable for any employee working in the West Asia, Korea or Italy, he added.

This is a new strategy to encourage Sri Lankans working overseas to make use of their earnings in a productive manner even in a small way rather than spending it for unnecessary things, he pointed out.

According to recent estimates, one in every 11 households receives foreign remittances and those migrants use to send at least Rs. 40,000 per month to their families in Sri Lanka.

Sri Lanka will have to take aggressive measures to increase foreign remittances as there was drop in such foreign exchange inflows in the past few months he disclosed.