Business

Moratorium welcomed with complaints

•EDB wants more industries
•JAAF wants more relief

Industry stakeholders lauded the Government’s recent decision to grant a six-month moratorium for the repayment of loans obtained from banks and financial institutions, although an apparel sector leader stated that this moratorium alone would not revive the Covid-19-hit sectors.

The Government’s decision was announced last Wednesday (18) and was on top of the credit support scheme announced in January for the micro, small, and medium-sized enterprises (MSMEs). The moratorium received the approval from the Cabinet of Ministers last week and was part of a number of measures that were announced to minimise the economic impact caused by Covid-19.

Speaking to The Sunday Morning Business, Sri Lanka Apparel Exporters Association (SLAEA) Chairman Rehan Lakhany stated that while the credit support scheme covers only the MSMEs, this moratorium covers large companies as well.

However, he added that at a time when most export orders are cancelled and sourcing raw materials for apparel exports is extremely difficult, the apparel sector needs more than a moratorium.

“Factories have asked to stop production because most of the orders are cancelled. The situation is very serious at the moment,” Lakhany noted.

When contacted, Export Development Board (EDB) Chairman Prabhash Subasinghe said that any moratorium given by the Government in the wake of Covid-19 and its impact on the country’s economy should also include all export sectors instead of two or three selected sectors.

The moratorium announced last week only applies to apparel and tech, as far as export sectors are concerned.

We also spoke to Sri Lanka Association of Inbound Tour Operators (SLAITO) President Mahen Kariyawasam, who stated that this moratorium would be beneficial for the sector as it would cover even the large-scale businesses, unlike the credit support scheme.

“This would be helpful for the tourism businesses that are heavily affected by Covid-19,” he added.

Our attempts to reach the Exporters Association of Sri Lanka (EASL) and The Hotels Association of Sri Lanka (THASL) for a comment on this moratorium failed, while the National Chamber of Exporters (NCE) Secretary General noted on Friday (20) that they are yet to have a discussion on this moratorium with the industry.

According to Co-cabinet Spokesman Dr. Bandula Gunawardana, the six-month debt moratorium is applicable for five heavily affected sectors – information and technology, apparel exports, tourism, foreign employment, and small and medium-sized enterprises (SMEs).

In addition to this, the Government has also requested the banks to provide working capital loans to these five sectors at an interest rate of 4%.