Sri Lanka: Pledge loan scheme for SME Paddy Millers, Cooperative Societies to purchase Yala paddy

In order to maintain a reasonable price for farmers a pledge loan scheme for Small and Medium Scale (SME) Paddy Millers and Cooperative Societies, under a concessionary interest rate, has been scheduled to be implemented for purchasing paddy in Yala Season this year. Accordingly, target group of this loan scheme is SME Paddy Millers and Cooperative Societies, subject to the maximum daily milling capacity of 25MT. All borrowers should have a valid Business Registration obtained from a relevant Government institution, and a licence issued by the Paddy Marketing Board.

Under this loan scheme, they can obtain loans upto Rs.50 million at interest rate of 7 percent per annum and the respective loans should be re-paid within 180 days. The following banks have been selected as Participating Financial Institutions (PFI’s) of this loan scheme.

• Bank of Ceylon

• People’s Bank

• Regional Development Bank

• Hatton National Bank PLC

• Seylan Bank PLC

• Sampath Bank Ltd

• Commercial Bank of Ceylon PLC

• DFCC Bank PLC

• National Development Bank PLC

• Nations Trust Bank

• Sanasa Development Bank Ltd

• Amana Bank PLC

• Cargills Bank PLC

• Pan Asia Banking Corporation PLC

The estimated total value of the loans to be disbursed by Banks under this loan scheme is nearly Rs. 6,500 million, and it has been planned to purchase paddy at a Minimum Purchase Price (MPP) declared by the Agriculture Department in order to ensure a reasonable price for paddy harvest of farmers. This concessionary loan scheme will be commenced based on a Cabinet Decision dated 30.12.2024, and the implementation period of the programme is from July 1 to November 15, 2025.

In addition, pledge loans amounting to around Rs. 6,850 million were provided to SME paddy millers and cooperative societies for the purchase of paddy under the pledge loan scheme implemented.

This article has been republished from The Daily News.