Hon. Prime Minister Ranil Wickremesinghe launched a loan scheme to help the small and medium scale entrepreneurs to start self-employments and industries to strengthen the village economy. Called the Swashakthi National Loan Scheme, the scheme was launched on the 4th of February 2017, the purpose of this project would be to strengthen the economy in each electorate of the country.
As per the Swashakthi scheme, the concept here would be to take 25,000 ideas, and out of that, create 25,000 businesses, thus strengthening the villages of Sri Lanka.
How does one apply for the Swashakthi Loan?
In order to apply for the loan, a project proposal would have to be submitted. An evaluation of the project will be carried out by participating banks, or by the Small Enterprise Development Division of the Ministry of National Policies and Economic Affairs. As for eligibility, all businesses that can potentially generate revenue in the Agriculture, Industrial and Service sectors are eligible for the scheme.
Once selected, Startups will receive a grant up to Rs. 10,000/- in lieu of initial expenses. The new would also have to make an equivalent contribution, thus kick-starting the initial project work.
New SMEs would also receive a maximum of Rs. 200,000/- as a startup loan, at an interest rate of 5.5% per annum. A further amount of up to Rs. 40,000/- will be distributed as a grant upon evaluation of the project after the initial six months. If you are an existing business, you are eligible for a loan of upto Rs. 250,000/- at an interest rate of 5.5%.
Startups and their projects would be judged on criteria such as novelty of business ideas, entrepreneurial and technical skills of the loan applicant, market demand for the proposed product, marketing and packaging strategies etc.
The Swashakthi programme is managed by the Ministry of National Policies and Economic Affairs in tandem with the Central bank of Sri Lanka. In order to apply for the scheme, SMW can submit applications via one of the partner banks.
Applying for the second part of the grant
In order to be eligible for the Rs. 40,000/- grant, the SME would have to meet a minimum of at least one of the points given below:
- Have a turnover growth of at least 20% per annum
- They must also create at least one additional employment opportunity
- The enterprise would also have to achieve 80% of the targets of the business plan set for the first 6 months
The eligible entrepreneur needs to apply for the second part of the grant through the Small Enterprises Development Division (SED) of MNP&EA or from the relevant PFI, after achieving at least one of the above targets.
Additional loans could also be obtained if necessary at a moderate interest rate. In order to do this, the SME would have to consult with the respective participating bank based on the success of the business.
The implementation of the Swashakthi scheme would aid approximately 25,000 individuals to support the government’s initiative to create one million employment opportunities.
According to the head of the Central Bank, as of now, the Central Bank of Sri Lanka has implemented schemes, thus distributing an approximate Rs. 9.5 billion among 917,200 MSME entrepreneurs during the last five years.
You can visit any of the banks shown in the diagram above to learn more about Swashakthi. In addition, you can also click here to download the application form to apply for the Swashakthi scheme.