Micro-SME loans up by 20pc each year: Minister

THE demand for micro to small-medium enterprise (MSME) loans at the National Development Bank has increased by an average 20 per cent each year since 2013, according to State Enterprises Minister Sasindran Muthuvel.
Muthuvel told Parliament yesterday when presenting the 2018 NDB annual report that lending for MSME loans from 2013 to 2018 was K586 million at a concessional rate of 6.5 per cent despite the Government providing K273 million over this period.
He said in 2018, NDB made an operating profit of K6.8 million before declaring an after-tax profit K10.1 million after loan impairment recovery of K3.6 million in compliance with international accounting standards.
“NDB has been operating profitably over the last eight years despite the reduction of its interest rate from an average of 16 per cent to 6.5 per cent in 2013 to implement the national governments SME stimulus policy resulting in reduction of profitability of the bank as there were reduced funding from the Government,” he said.
“Following the successful implementation of the Government’s SME stimulus package and the remarkable performance of the NDB board and management, I am convinced that NDB is ready to be entrusted with adequate recapitalisation of K200 million annually so that NDB can increase its lending to the agriculture and MSME sector to assist our Government to create wealth for our citizens.
“NDB has funded a lot of the indigenous businesses and championed financial inclusion in the country, meeting the hopes and aspirations of the silent majority.”