President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa have extended their fullest backing to support the initiatives of the Confederation of Micro, Small and Medium Industries (COSMI) to develop the small, medium and micro industries which make a salient contribution to the economy, said COSMI President Nawaz Rajabdeen.
He said the Confederation has made key proposals to the Government to boost the growth of small industries particularly those affected by the global pandemic.
According to statistics of the 1.3 million registered small and medium sector industries around 95 percent are micro and small industries.
“There are around 600,000 micro, small and medium industries in the country that are not registered. Our aim is to help these industries to register and enable them to avail themselves of low cost funding to support their industries,” Rajabdeen said.
“We will be signing an MoU to affiliate a newly formed institution of women entrepreneurs. Around 107,000 women entrepreneurs will be linked to COSMI through the initiative,” Rajabdeen said, adding that COSMI will initiate livelihood programs to generate employment opportunities while reviving sick industries.
Rajabdeen said that an advisory committee of COSMI will help link industries with financial institutions to obtain low cost capital for industrial development.
“Unregistered micro and small industries need to be registered at regional level to be eligible to obtain low cost funding,” he said, adding that the Confederation is keen to help agri-based industries, animal husbandry, light metal, plastic recycling and other small industries.
MSMEs have welcomed the decision of the Government to extend the bidding deadline for loan infusion. “Due to the lockdowns, MSMEs faced collapse. We welcome the government’s life support to MSMEs by giving working capital loans at 4% interest. However, due to logistical disruptions, many MSMEs were unable to join this scheme. We thank the Government for realising their plight and extending the Saubagya deadline which is a critical relief by itself,” said Rajabdeen.
“The supply chains and cash-flows of MSMEs have been severely disrupted by lockdowns. Following lockdowns, MSMEs in sectors such as apparel, processed foods, and handlooms are making a slow comeback while MSMEs in other sectors such as tourism and footwear and leather may take more time. We praise the Central Bank for extending the application deadlines,” Rajabdeen said.
The loans to be granted under the Saubhagya (Prosperity) Loan Scheme as a ‘Covid-19 Renaissance Facility’ will be made available to MSMEs in manufacturing, services, agriculture, construction, self-employment businesses and individuals and the businesses in the sectors of tourism, exports and related logistics suppliers. Financial institutions are to grant a working capital loan facility to eligible performing and non-performing borrowers not exceeding two months’ working capital needs and to be repaid over two years at an interest rate equal to 4% p.a.
“The Monetary Board decided to extend the deadline of the 4% Working Capital Loan Scheme on August 19.
Covid-19 affected businesses and others can submit their loan applications under the Saubagya Covid-19 renaissance facility to licensed banks until September 30, 2020,” the Central Bank stated on August 21.