Aug 18, 2008 (LBO) – Sri Lankan tea exporters say banks should be less fearful in lending for shipments to key markets in the volatile Middle East and Russia and adopt new lending methods that use brands as collateral. Exporters say they are being restrained by high borrowing costs and a marked reluctance by banks to give loans for tea shipments to the Middle East and Russia, the main markets for Ceylon tea.
“Lending organisations should take brands as value in the balance sheet and probably adopt new lending methods,” said Romesh Moraes of the Tea Exporters Association.
Banks must lend towards brand building, especially those Sri Lankan-owned tea brands that have been successful in overseas beverage markets, he told the association’s annual general meeting Friday.
“These are our brand, they need to be supported.”
Banks now look at lending to the Middle East and Russia with “loads of fear” and should change their perceptions.
Tea exporters face very high capital costs, with inflation hitting a record near 30 percent earlier this year, and interest rates rising in tandem.
But Moraes said Sri Lankan teas were fetching high prices and the industry earned a record 1.2 billion dollars last