Sri Lanka cuts lending rate for farmers ahead of polls

Dec 30, 2009 (LBO) – Sri Lanka™s Central Bank said it will slash lending rates for farmers with effect from January 1, 2010 barely a month ahead of crucial presidential elections. Total loans amounting to about 10 billion rupees are disbursed each year under this loan scheme.

Under the Agro Livestock Development Loan Scheme the interest rate on loans for setting up milk processing factories and agro-based processing industries will be reduced to 12 percent from 14 percent.

The ALDL scheme, which was introduced under the government™s 2008 budget to increase liquid milk production in the country, disbursed 500 million rupees in 2009.

A large number of dairy farmers have shown keen interest to register under this loan scheme, the Central Bank said.

The Krushi Navodaya Loan Scheme caters to the medium term loan requirements of the farmer community for agriculture and animal husbandry.

The statement said the government™s aim in reducing interest rates on loans is to encourage new investment in agricultural and animal husbandry projects.

This will enable an increase in the volume in agricultural produce and liquid milk and other livestoc