SME factories want to reschedule loans
View(s):The apparel industry, severely struck by the recent drop in demand for new garments from Europe, has caused a drastic reduction in orders as a result of which a rescheduling of their loans is warranted in order to retain themselves.
With bank interest rates surging to 30 per cent the industries are faced with a crisis as their incomes have dropped.
The capital cannot be paid due to low income so ‘we’ need a longer rescheduling of the loans in order to stay afloat, Chamber of Garment Exporters Secretary General Hemantha Kumara told the Business Times.
Sri Lanka’s garment sector has 85 SME factories with a direct workforce numbering 35,000 and an indirect workforce of 20,000.
In addition, Mr. Kumara explained they also expect some form of relief in terms of the statutory requirements of EPF and ETF payments that they are expected to meet in order to continue operations.
However, due to lack of any legal possibility to do so they are unable to obtain any relief in this regard, he said.
Due to the drop in orders there has been a downsizing of almost all factories by at least 50 per cent and as a result there has been a drop of about 30 per cent of the workforce as well, Mr. Kumara explained.
The government has to come up with a scheme on rescheduling the bank facilities, he said adding that the private banks need to take a decision as well and assist the SMEs to survive.
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