Sri Lanka: Central Bank urges bank to evolve collateral free lending for MSMEs

New Delhi, Mar 1 (KNN) In a bid to facilitate credit flow to the Micro, Small and Medium Enterprises in the country, the Central bank Governor of Sri Lanka Dr Indrajit Coomaraswamy has appealed the banks to come up with collateral free lending framework.

Coomaraswamy said that it is a collective responsibility of the different stakeholders to help the young entrepreneurs to make their own MSME units without worrying about the finance.

Listing the main obstacle in an easy MSME ecosystem in Sri Lanka, the Central Bank governor said that the first generation entrepreneurs face the main task of coming up with a collateral to obtain loan from the banks.

“These potential youth despite having innovative ideas are not able to set up their units as they re not able to obtain loans from banks due to their inability to meet collateral requirements”, he said.

He urged the banks to fine some way of granting small loans without any collateral requirement for the MSMEs on the basis of National Vocational Qualification.

Informing of the potential of the MSME sector in the country, he said that there are numerous cases in which young entrepreneurs are able to start their startups without any tax concessions.

It is now time to handhold these units by providing them finance, he said. The governor made these remarks during an interactive session with the representatives of banks from across the country. (With Inputs from a media report) (KNN/DA)