The Ministry of Finance, Public Administration, and National Policy has announced the implementation of a 'Pledge Loan Scheme' for small and medium-scale paddy mill owners.
This scheme aims to provide financial assistance for the purchase of paddy during the Yala season.
The Finance Ministry stated that the loan scheme will be offered at a concessional interest rate, ensuring that farmers receive a fair price for their paddy and supporting the growth of small and medium-scale paddy millers. Under this scheme, paddy millers with a valid business registration and a maximum daily milling capacity of 25MT will be eligible to apply for loans.
Each miller can obtain a loan of up to Rs. 50 million, with an effective interest rate of 16% per annum. Out of this interest rate, 12% will be borne by the millers themselves, while the remaining 4% will be subsidized. The repayment period for the loans is set at 180 days.
The total value of loans to be disbursed by the People's Bank and Bank of Ceylon is Rs. 4,000 million. This concessionary loan scheme, which was approved by the Cabinet on August 14, 2023, will be implemented from September 1 to November 30 of this year, as per the Finance Ministry's statement.
