Seylan Bank has become one of the participating financial institutions in a program set up by the Asian Development Bank (AfDB) and the Ministry of Finance to develop smallholder tea farmers on the island.
The AfDB, through the Project Management Unit of the Development Finance Department (DFD) of the Ministry of Finance, has offered a complementary financing line of credit for this purpose.
Deputy Managing Director, Branch Credit of Seylan Bank, Ranil Dissanayake said, “Our successful disbursement of the first tranche has given us this invaluable opportunity to also receive the second tranche. Seylan Bank sees the SME sector as the backbone of the national economy and smallholder tea farmers are a key target group.
“The slice is effective for new plantings as well as replantings, which extends our reach to many planters who already have their plantations and those considering starting tea planting. We are proud of the confidence the AfDB has placed in the Bank by allocating the second tranche and enabling us to continue supporting smallholder tea farmers,” he said.
Seylan Bank, which successfully disbursed the first tranche of this line of credit, recently received approval to disburse the second tranche.
Of the five participating banks, Seylan Bank was offered the largest amount to disburse to smallholder tea farmers. This positions the financial institution as one of the key transformative agents to act as a catalyst for the growth of smallholder tea farmers across the country.
Smallholders with less than 50 acres can borrow under the program for replanting, replanting, infilling, irrigation and mechanization.
Smallholders with less than 10 acres can get a grant of 10% of the loan value for replanting and new planting only. The applicable interest rate is 7% per annum and will be subject to a letter of recommendation from the Tea Small Holdings Development Authority (TSHDA). The maximum duration of the loan has been set at 10 years, including a maximum grace period of two years depending on the purpose for which the financing is provided.