Concessionary Measures to Micro, Small and Medium Enterprises (MSMEs) and Individuals affected by the Present Macroeconomic Conditions

The Central Bank of Sri Lanka (CBSL) has implemented several schemes of debt moratoria and concessions to assist the borrowers affected by the COVID-19 outbreak and subsequent macroeconomic developments, through Financial Institutions (FIs) supervised by CBSL. These schemes included extended repayment periods, concessionary rates of interest, working capital loans, debt moratoria and restructuring/rescheduling of credit facilities for affected borrowers.

These concessions greatly assisted the small and medium enterprises of many affected sectors including tourism, apparel, plantation, information technology, logistic service providers, transportation, operators of school vans, lorries, small goods transport vehicles and buses, and private sector employees. The last phase of the moratoria granted to COVID-19 affected borrowers of the banking sector and Non-Banking Financial Institutions (NBFIs) Sector ended on 30.06.2022 & 31.03.2022, respectively.

In July 2022, considering the need to unwind moratoria in a sustainable way, in order to prevent any elevated strain on the financial system, CBSL requested Licensed Banks (LBs) and NBFIs to provide appropriate concessions to affected borrowers in all economic sectors including MSMEs on a case-by-case basis for a period of 6 months through Circular No.02 of 2022 and Circular No.01 of 2022 issued to LBs & NBFIs, respectively, to enable such borrowers to agree on suitable repayment arrangements based on their new repayment capacity. In the meantime, CBSL has required the FIs to set up Post COVID-19 Revival Units in order to identify and assist under-performing and non-performing borrowers affected by the pandemic for the purpose of reviving viable businesses with the potential of contributing to the national economic growth.

During the different phases of moratoria and concessions, FIs have approved over 3.3 million requests for concessions, amounting to a total of Rs. 5,994 billion (Table 1).


Published Date: 

Wednesday, March 8, 2023