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NBFIs shut out of Saubhagya scheme: small, micro businesses suffer

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By Senath Nanayakkare

Lower-end businesses and micro businesses are at a clear disadvantage because only the licenced banks have been authorised by existing laws to provide the Saubagya Covid – 19 Refinance Facility, which is much in demand in the difficult economic situation, Krishan Thilakaratne, Director/CEO, Commercial Leasing and Finance PLC told The Island yesterday.

“As a result, small-time business ope13rators have not been able to benefit from these funds,” he said.

“The Monetary Law Act does not include Non-Banking Financial Institutions (NBFIs) as a Participating Credit Institution (PCI). This restricts NBFIs from participating in schemes originated by the CBSL. The recent “Saubaghya” loan scheme is one such scheme in which only the Licenced Commercial Banks participated. This has deprived some SMEs, lower-end SMEs and Micro market clientele, of vital low cost finance. More granular distribution of “Saubaghya” funds through NBFIs to Micro and SME sectors would have created more economic impact and caused a meteoric rise in the country’s GDP. We hope the necessary laws would be amended to correct these fundamental issues and NBFIs are used as financial conduit in government’s developmental programmes in future,” he said.

The Central Bank under the instructions of the government introduced this refinance facility for businesses adversely affected by the COVID-19 outbreak, under the Saubagya (Prosperity) Loan Scheme

Given the high demand for the new facility, the allocated amount of Rs. 50 billion has been increased to Rs. 150 billion and the deadline to submit application has been extended up to August 31.

The regulator approved 3,985 new loan applications amounting to Rs.11,829 million, submitted by licensed banks under this facility during the period 13-23 July 2020. However, NBFIs which play a crucial role in the economy offering their services in urban as well as rural areas by granting micro loans allowing for growth of small entrepreneurs have been left out of this important loan scheme.

 



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Tobacco and alcohol claim 22,000 lives annually

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Health and Mass Media Secretary Dr Anil Jasinghe speaking to NPP MP Samanmali Gunasinghe during the sectoral oversight committee meeting

NATA to be given more powers

The Parliamentary Sectoral Oversight Committee on Health, Mass Media and Women’s Empowerment has agreed in principle to ban single-stick sales of cigarettes and increase taxes on tobacco products, according to parliamentary sources.

The decision was reached during an institutional review of the National Authority on Tobacco and Alcohol (NATA) held recently in Parliament. The meeting was chaired by MP Dr. Nihal Abeysinghe.

During the review, NATA officials informed the committee that approximately 22,000 deaths occurred annually in Sri Lanka due to tobacco and alcohol consumption. They said the country suffered an economic loss of between Rs. 225 billion and Rs. 240 billion each year due to the consumption of tobacco products and alcohol.

Officials told the committee that steps were underway to amend the National Authority on Tobacco and Alcohol Act to grant it more powers.

Noting that 104 countries had already banned the sale of loose cigarettes, the underscored the need for Sri Lanka to adopt a similar policy. When loose cigarettes were sold, mandatory health warnings on cigarette packets were not visible to consumers, the NATA officials said.

The committee was also briefed on the importance of imposing taxes on cigarettes after determining their retail prices, as part of broader measures aimed at reducing tobacco consumption.

Commenting on the matter, Dr. Abeysinghe said the committee was prepared to extend its full support for the proposed amendments to the Act, as well as for other programmes and initiatives undertaken by the National Authority on Tobacco and Alcohol.

Deputy Chair of the Committees Hemali Weerasekara, committee members MPs Dayasiri Jayasekara, Muneer Mulaffer, Samanmali Gunasinghe, Prof Sena Nanayakkara, Dr S. Sri Bhavanandarajah, Dr Ramanathan Archchuna and with the permission of the Chair, MPs Dr. Janaka Senarathna and Dr Pathmanathan Sathiyalingam were present at the committee meeting.

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Development Officers hunger strike drags on for fourth day

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Development officers on hunger strike demanding absorption into the teacher service, outside the Presidential Secretariat at Colombo.

The hunger strike launched by a group of Development Officers demanding their absorption into the teacher service entered its fourth day yesterday (29) outside the Presidential Secretariat Colombo.The protesters, members of the Ceylon School Development Officers’ Union (CSDOU), began their satyagraha on January 26.

One of the four officers participating in the fast-unto-death fell seriously ill on the fourth day and was rushed to hospital for treatment, while the remaining three continued the hunger strike. Earlier, Dr. Chamal Sanjeewa, President of the Doctors’ Trade Union Alliance for Medical and Civil Rights, visited the protest site to examine the health of the protesters and oversaw the administration of saline to those suffering from dehydration.

CSDOU Secretary Viraj Manaranga criticised authorities for refusing to listen to the protestors.

“Not a single official from the relevant authorities has come forward to hear our grievances, which is a matter of serious concern,” he said, accusing the government of negligence and “stepmotherly treatment” of the issue.

The Ceylon Teachers’ Union (CTU) echoed the need for legal and procedural adherence, noting that there are currently 40,000 teacher vacancies nationwide. The union stressed that a significant number of development officers and graduates remain outside the teaching service, despite provisions in the teacher service constitution allowing for their appointments, which fall under the powers of Provincial Councils.

National People’s Power (NPP) MP Chandana Sooriyarachchi said graduate development officers are required to sit a compulsory competitive examination. Former Education Minister Akila Viraj Kariyawasam, who oversaw appointments under the Good Governance administration, also stated that direct appointments are legally not feasible. He added that school development officers were absorbed into the teacher service in 2018 through competitive exams and stressed that appointments must follow established procedures, warning that strikes would not alter this process.

The hunger strike continues to draw attention to the demands of the Development Officers as they urge the government to take immediate steps to address their grievances.

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IMF urges Lanka to diversify trade amidst global tariff risks

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Srinivasan

Sri Lanka and other small Asian economies must accelerate trade diversification or face heightened vulnerability to global tariff disputes and shifting supply chains, warned Krishna Srinivasan, Director of the Asia and Pacific Department at the International Monetary Fund (IMF).

Speaking in Colombo on the evolving global trade landscape, Srinivasan highlighted Asia’s growing exposure, particularly in the wake of tariff tensions between the United States and China. “Asia benefited a lot from trade integration, benefited a lot from openness to trade,” he said. “So much so that when tariffs were imposed by the US, Asia was subject to the highest level of tariffs.”

He cautioned that the region that gained most from open markets is now at risk of bearing the brunt of protectionist measures. For countries like Sri Lanka, he said, the message is clear: diversify or be exposed.

Srinivasan also noted that South Asia remains the least integrated sub-region in the continent. “Having greater integration with your partners within the sub-region will take you a long way,” he said. For small economies, he added, building deeper trade ties with neighbours and broadening export and production bases is essential for resilience.

Meanwhile, Sri Lanka has received a strong vote of confidence from the IMF following a high-level meeting between President Anura Kumara Dissanayake and the delegation at the Presidential Secretariat.

The visiting IMF representatives, who arrived on January 22 to assess the damage caused by Cyclone Ditwah, spent a week touring the island, engaging with affected communities and observing the impact firsthand. In a briefing, the delegation praised the government’s swift relief efforts, infrastructure restoration, and commitment to rebuilding lives, noting widespread appreciation among citizens for the administration’s handling of the crisis.

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