The Ministry of Finance, Public Administration and National Policy announces that a ‘Pledge Loan Scheme’ will be in place from 01 September for small and medium scale paddy mill owners to purchase paddy for the Yala season in Sri Lanka.
The loan scheme will be introduced under a concessional interest rate in order to maintain a reasonable price to farmers and strengthen the SME (Small and Medium-scale Enterprise) paddy millers, the Finance Ministry said in a statement.
Accordingly, Small and Medium Scale paddy millers with a valid business registration, subject to the maximum daily milling capacity of 25MT of paddy will be able to obtain loans.
Furthermore, the ministry stated that one miller is eligible for the loan at the effective interest rate of 16% per annum under the maximum loan amount of Rs. 50 mn. Out of the effective interest rate, 12% interest rate has to be borne by the respective SME paddy millers and the interest subsidy is 4 %.
The respective loan should be repaid within 180 days. The total value of the loans to be disbursed by the People’s Bank and Bank of Ceylon is Rs. 4,000 mn, it added.
This concessionary loan scheme which has been commenced based on a Cabinet Decision dated 14 August 2023, is implemented from September 01 to November 30 this year, according to the Finance Ministry.