The Finance Houses Association (FHA), which is the apex body of the industry, lobbied to be included in the facility arguing they would be able to reach out to companies and community segments that are not covered by conventional commercial banks. The scheme began as a refinancing facility, which was later expanded to a credit guarantee scheme after the Cabinet of Ministers extended the program to Rs.150 billion.
“We do not understand why finance companies have not been included in this program. We have the capacity to reach people who operate at the lower level of the economy and support them, unlike banks that have links to larger companies or Small and Medium Enterprises (SMEs). Therefore we hope that the Central Bank will consider our request,” said FHA Immediate Past Chairman Krishan Thilakarathne.
In its weekly performance update, the Central Bank (CBSL) last Friday said it had approved 22,306 loans amounting to Rs. 60.25 billion under the Saubagya COVID-19 renaissance facility as of 10 July.
Just last week approval was given for 2,066 new loans, amounting to nearly Rs. 7 billion. CBSL said the licensed banks have already disbursed Rs. 30.5 billion among 13,333 borrowers countrywide.