18th March 2011, www.island.lk
The Commercial Bank of Ceylon PLC has commenced operations under the latest World Bank funded Small and Medium Sector Development Facility (SMEDeF) for the development of Small and Medium Scale Enterprises (SMEs), the bank said.
Development loans worth nearly Rs. 3 billion are to be disbursed under this credit line by Participating Credit Institutions (PCIs).
The Commercial Bank entered into an agreement with the government on 9th of March, becoming the first PCI to do so out of the eight PCIs — three state and five private banks — invited by the Project Implementation Unit (PIU) of the Department of Development Finance of the Ministry of Finance and Planning, to formalise proceedings to commence disbursements.
The Bank has already commenced accepting and processing of applications for this credit facility.
Small & Medium Enterprises with an annual turnover of less than Rs. 300 million operating in the manufacturing and service sectors are eligible to apply under this facility for development loans. A floating interest rate linked to the Average Weighted Deposit Rate of the Central Bank applies for these loans. This rate is in single digits at present, the Bank said.
Purchase of plant, machinery, commercial vehicles and other fixed assets, permanent working capital requirements and construction of factory buildings can be financed through this facility.
Borrowers can also obtain Technical Advice from the Commercial Bank. The Technical Assistance facility includes comprehensive workshops at which participants will be educated on aspects crucial to the success of their enterprises.
A maximum of Rs. 60 million will be available to a single applicant under this project. The repayment period for those who obtain loans exclusively to fulfil working capital requirements is three years. For those who obtain loans for other eligible requirements the repayment period is 10 years, inclusive of a two year grace period.
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