In a bid to bolster the agricultural sector and support small- and medium-scale paddy millers, storage owners, and collectors, the government has unveiled a concessionary pledge loan scheme amounting to Rs. 9 billion. Effective from February 1st, the initiative targets the procurement of paddy for the Maha Season 2023/2024.
The scheme, envisioned to stabilize prices for farmers, offers loans at a concessional interest rate. Eligible beneficiaries include SME paddy millers with a maximum daily milling capacity of 25MT, paddy storage owners with adequate capacity, and paddy collectors with sufficient storage or valid lease agreements with storage owners or SME millers.
Applicants must possess valid business registrations issued by relevant state institutions. Under the scheme, loans can be availed at an effective interest rate of 15% per annum, with a maximum cap of Rs. 50 million per SME miller and Rs. 25 million per storage owner or collector. Of the total interest, borrowers will bear 11%, while the government subsidizes 4%. Loans must be repaid within 180 days.
Participating banks include Bank of Ceylon, People’s Bank, Regional Development Bank, Commercial Bank of Ceylon PLC, DFCC Bank Ltd, National Development Bank PLC, Hatton National Bank PLC, Sampath Bank Ltd, Sansa Development Bank Ltd, and Seylan Bank PLC. The collective disbursement amounts to Rs. 9,000 million.
In addition, the government plans to procure paddy at a minimum price set by the Department of Agriculture for the Maha season 2023/2024.
This initiative, sanctioned by a Cabinet Decision dated January 29th, 2024, remains operational from February 1st to April 30th of the current year.
