Government decides to increase low-interest loan amount offered to victims of microfinance crisis

The government has decided to increase the low-interest loan amount offered to the borrowers of microfinance loans, who were charged with extremely high interest rates, by Rs.20,000 to Rs.60,000, the Finance, Economy and Policy Development Ministry said. 

The low-interest loans were already being provided through the Co-operative Rural Banks and Thrift and Credit Unions to these borrowers in the North and North Central provinces to ease off their debt burden.

However, various parties have requested the ministry to increase the ceiling of the current low-interest loans.

Accordingly, the low-interest loan offered to the people, who are caught in microfinance debt traps, will be increased from Rs.40,000 to Rs.60,000.

Further, the interest rate on these loans was reduced to 9 percent, from 14 percent. 

It has also been decided to streamline the programme, which is being implemented by six District Secretariats. With the decision, it is expected that many more will be eligible for the loan scheme. 

The Cabinet of Ministers has approved the proposal presented by Prime Minister Mahinda Rajapaksa in this regard, as the Finance, Economy and Policy Development Minister. 

The ministry said already Rs.292 million and Rs.542 million have been allocated for the Northern and North Central provinces, respectively and the funds would be disbursed through the Co-operative Rural Banks and Thrift and Credit Unions.(Source- Daily News)