CBSL’s COVID-19 support to SMEs: Is it happening?

Monday, 11 May 2020 00:00 - - {{hitsCtrl.values.hits}}

By Ranel T. Wijesinha

I need not even mention that a large number of small and medium enterprises who provide products or services to a wide cross-section of the people of our country, and who in turn, collectively generate business for a wide variety of suppliers, also collectively employ a very large number of less than privileged people, are in dire straits due to COVID-19.

The persons these SMEs employ have a very high dependence on their jobs and payroll, quite simply, to sustain their very modest lifestyles. Thus, inadequacies and delays in addressing this matter can lead to serious socioeconomic and social political issues.

The Government has identified with this, to a certain extent, and through the Central Bank and through the banking system has made arrangements to grant working capital facilities at concessionary rates of interest.

While Licenced Commercial Banks receive funds from the Central Bank at 1%, these banks lend these monies at a concessionary rate of 4%. This laudable Government initiative would be of academic value if there are delays on the part of either the Central Bank or its Licenced Commercial Banks.

The Central Bank and Commercial Banks may like to study this matter to determine whether there might be a large number of neglected, badly handled, worthy and eligible SME customers in order to improve the banks’ responsiveness to a vital segment of the economy and a key component of society.