By Sanath Nanayakkare

Interest rates play a pivotal role in the financial landscape, significantly impacting micro and small businesses as well as marginal borrowers. The Island Financial Review learned from sources familiar with small business loans that some banks charge as high as 20% of interest from small business owners and self-employed people for loan amounts below Rs. one million, given out for a period of 2-3 years.

“While this might seem like mere numbers, interest rates can profoundly impact a small business’s survival or the very endurance of own-account workers who are self-employed and face many challenges in the informal economy. The current AWPR favours the top-end customers of the banks, and the small-timers have not been provided with any relief in the low-interest rate environment. In other words, they are not able to raise funds at a rate lower than their expected return rate. This situation presents small businesses with a difficult dilemma. In this context, the Central Bank Governor’s recent comments on this matter have been widely welcomed by borrowers who fall into the marginal category,” they said.

These sources referred to the following comments made by the Central Bank Governor Dr. Nandalal Weerasinghe presiding over last week’s Central Bank Policy Agenda meeting for 2025.

Touching upon excessive interest rates still prevalent in the market, Dr. Weerasinghe said:

“The Central Bank observes some excessive, outlier rates of interest on facilities extended to Micro, Small and Medium Scale Enterprises (MSMEs) as well as marginal borrowers and certain credit products which are not consistent with the prevailing relaxed monetary policy stance. Moreover, risks associated with lending are on the decline while the credit appetite of banks and financial institutions is improving given the overall stability and recovery witnessed in the economy. Therefore, with a view to making low-interest rate credit accessible, the Central Bank will closely work with banks and other financial institutions to reduce the excessive interest rates still prevalent in the market which are not consistent with the prevailing relaxed monetary policy stance.”

Being deliberate in balancing the scale, the Governor said,” While low interest rates have helped revive credit and contributed to improving the overall business sentiment, they could also disproportionately hurt savers. However, unlike during the high inflation episode, real returns on deposits have been positive, with inflation successfully being reined into low levels. Interest rates have their cycles, and the Central Bank will manoeuvre interest rates to ensure that inflation is kept low and stable with a view to promoting overall public welfare.”

One World Duty Free (ODF) is a leading and an omnichannel duty free global travel retail brand that is headquartered in Singapore, proudly announced its latest duty- free store opening at the Port City Duty Free Mall in Colombo on 1 January 2025. This marks a milestone in the ODF’s strategic entry to the South Asian market which is expected to offer its premium shopping experience for international travelers as well local consumers.

ODF eagerly anticipates the completion of the second phase of its Port City Duty-Free store by March 2025. This expansion will fully realize the store’s 12,800 sq. ft. retail footprint, offering an elevated shopping experience.

Keira Zhang, Chief Executive Officer (CEO) of One World Duty Free, stated, “The opening of our flagship store in Sri Lanka’s Port City is a pivotal moment for ODF as we expand into the South Asian market. Our carefully curated selection of world-class brands and categories underscores our dedication to providing travelers with an unmatched retail experience. This initiative also supports Colombo’s transformation into a leading retail and tourism hub.”

ODF envisions for the growth of the emerging markets, the launch of the Port City Duty-Free Mall reflects ODF’s commitment to redefining travel retail through innovation and exceptional customer experiences. This duty free store at the Port City, is expected to attract over 2 million visitors annually demonstrating its position as premier shopping destination.

The Sri Lankan passport holders including dual citizens of Sri Lanka and foreign passport holders with resident visa in Sri Lanka who have returned to Sri Lanka with a valid proof of arrival are eligible for an annual duty-free allowance of $2000. The commencement of the allowance is permitted for 4 days from the first day of the arrival. For tourists with valid foreign passports, they will not be subject to an annual allowance limit and such are eligible to purchase from the duty free store from the date of arrival. Their Purchases can conveniently be collected from the airport pickup counter at Bandaranaike International Airport (BIA). For further information, please contact the ODF hotline at +94 77 504 0064.

Sri Lanka Insurance has expanded its presence in the Upper Western region with the opening of its Naiwala Agency Business Development Center (ABDC) on the 12th of December at No.90/6/C, Airport Road, Naiwala junction, Veyangoda.

SLIC Life Chief Business Officer Namalee A. Silva, Deputy General Manager – National Sales (Life) Jagath Welgama, Upper Western regional management, Branch Management of Veyangoda representing Life and General categories participated in the event.

Distinguished invitees and customers of the area were also in attendance at the event.

Agency Business Development Centers (ABDC) allows SLIC to further enhance its reach, which provides convenience and speed of service delivery to its loyal customers in their protection needs.