CB-approved 3,985 new loans amounting to Rs.11.8 billion given under the Saubagya COVID-19 renaissance facility

The Central Bank of Sri Lanka (CB) has approved 3,985 new loan applications, amounting to Rs. 11,829 million, submitted by licensed banks under the Saubagya COVID-19 renaissance facility phase II and III during the period July 13-23, the CB said in a media release on Friday.

With the new approvals mentioned above, the cumulative number of loan applications so far approved by the CB under the Saubagya COVID-19 renaissance facility increased to 26,291 as of July 23. Similarly, the total value of loans approved by the CB increased to Rs. 72 billion as of July 23. The licensed banks had already disbursed Rs. 45.7 billion among 18,007 borrowers island-wide as of July 23. 

The CB, in consultation with the Government, has introduced this facility in three phases to provide a total of Rs. 150 billion as working capital loans at 4 per cent per annum interest rate with a repayment period of 24-months, including a grace period of 6-months, to businesses, including self-employment and individuals, adversely affected by the COVID-19 outbreak, the release said. 

Under phase 1 of the loan scheme, the CB provides refinancing facility to the participating financial institutions (PFIs). Under phase – II of the loan scheme, the CB provides loans to PFIs at 1 per cent interest rate against collaterals approved by the Monetary Board. Under Phase III of the loan scheme, PFIs are expected to use their own funds to grant loans to the businesses and / or individuals and the CB provides credit guarantee ranging from 50 per cent to 80 per cent on loans so granted and a 5 per cent per annum interest subsidy for PFIs to cover their credit risk and cost of funds.