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No bank loans for buffer zone businesses
By Marisa de Silva
Thousands of tsunami victims who lived within the 100-metre buffer zone will not receive any financial help to re-build their businesses or industries because lending agencies will not accept their existing properties as collateral for loans.

Banks, finance and leasing companies were among those called upon by the Central bank to disburse the government's "Susahana" tsunami relief loan scheme.

In view of the Government's policy decision over the 100 metre buffer zone, the Central Bank cannot allow the lending organisations to accept properties within this zone as collateral.

The loans were to be extended to the fisheries, hotel, shops and small industries to help rebuild the businesses or livelihood of the tsunami-affected people.

The Central Bank signed an agreement with commercial banks, licensed specialist banks, registered finance companies and registered leasing companies to refinance them.

They in turn will help finance their customers to get their businesses back on the road according to the scheme. This loan scheme empowers banks to grant loans to the tsunami victims, with the assurance of being refinanced by the Central Bank.

However, the main problem has been that the banks are unable to obtain a proper security from victims residing within the 100-metre buffer zone. Central Bank Deputy Director K.P.N.S. Karunagoda said banks would have to take the risk if they gave loans to tsunami victims without any collateral. He said it was a serious problem and needed to be addressed urgently.

National Savings Bank Credit Manager A. Amaratunga said they were not sure whether or not they should process loan claims from those within the 100-metre buffer zone and were awaiting guidelines from the Government,

Hatton National Bank Credit Manager Lalith Wickramanayake said they were only dealing with victims whose properties were beyond the 100-metre buffer zone.

Sampath Bank Credit Officer Lasantha Fonseka expressed similar views saying that giving loans to tsunami victims without a proper collateral would be a problem. Commercial Bank Assistant General Manager Nimal Lukshman said they would consider loan applications on a case-by-case basis.

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