Saubagya COVID-19 renaissance facility: CBSL approves 26,291 loan applications
The Central Bank of Sri Lanka (CBSL) said that it has approved 3,985 new loan applications amounting to Rs. 11,829 million, submitted by licensed banks under the Saubagya COVID-19 renaissance facility Phase II and Phase III, from 13 to 23 July 2020.
With these new loan applications, the cumulative number of loan applications approved by the CBSL under the Saubagya COVID-19 renaissance facility increased to 26,291 as of 23 July 2020. Similarly, the total value of loans approved by the CBSL increased to Rs. 72,079 million as of 23 July 2020. The licensed banks had already disbursed Rs. 45,777 million among 18,007 borrowers island-wide as of 23rd July 2020 as shown in the table below.
The CBSL, in consultation with the Government of Sri Lanka, has introduced this facility in three Phases to provide a total of Rs. 150 billion as working capital loans at 4% per annum interest rate with a repayment period of 24 months, including a grace period of 6 months, to businesses, including self-employment and individuals, adversely affected by the COVID-19 outbreak.
Under Phase 1 of the loan scheme, the CBSL provides a refinancing facility to the participating financial institutions (PFIs). Under Phase – II of the loan scheme, the CBSL provides loans to PFIs at a 1 % interest rate against collaterals approved by the Monetary Board. Under Phase III of the loan scheme, PFIs are expected to use their own funds to grant loans to the businesses and / or individuals and the CBSL provides credit guarantee ranging 50%-80% on loans so granted and a 5% per annum interest subsidy for PFIs to cover their credit risk and cost of funds.
COVID 19 affected businesses and individuals can submit their loan applications under the above Loan Scheme to respective banks before 31 August 2020.