August 08, 2007 (LBO) – Sri Lanka’s Central Bank Governor Nivard Cabraal said he will look at the banking sector’s reluctance to lend to ship-owners and called for new methods of financing that may allay the concerns of lenders. The island’s banks had hitherto been reluctant to provide ship financing as they were unfamiliar with the business and its risks, he told a conference on the island’s prospects of becoming a maritime hub.
The conference was organised by the Sri Lanka branch of the Institute of Chartered Shipbrokers to mark its 20th anniversary and comes at a time when the country has started several port development projects.
Sri Lanka, although being an island, hardly figured among nations that owned fleets of ships, Cabraal said.
Only a handful of Sri Lankan companies own ships and those too are small, second hand vessels.
Cabraal said the island’s maritime community had complained of difficulties in getting bank loans to buy ships in an effort to get into the business which has now become lucrative given the boom in world trade.
He acknowledged that banks were wary of giving loans to buy ships as they were unfamiliar with its risks.
This was because of difficulties in securing collater