Communications Department
30, Janadhipathi Mawatha, Colombo 01, Sri Lanka.
Tel : 2477424, 2477423, 2477311
Fax: 2346257, 2477739
E-mail: [email protected], [email protected]
Web: www.cbsl.gov.lk
Press Release
Issued By
Date
Regional Development Department
2008-04-23
Agro Livestock Development Loan Scheme (ALDL)
With a view to enhancing local liquid milk production, milk and milk based products and promoting
agricultural crop processing industries in the country, the Central Bank of Sri Lanka (CBSL), in
association with the Government of Sri Lanka (GOSL), has launched a special credit programme
effective April 2008. A total of Rs.5000 million at a concessionary rate of interest is expected to
be disbursed under the scheme to small scale dairy farmers, liquid milk processing industries and
agricultural crop processors. The credit scheme has been introduced as announced in the Budget
2008.
With the sharp increase in the prices of milk powder and food crops in global market, a favourable
environment has been created for development of local dairy industry and the food crop sector.
Non-availability of a credit scheme for dairy products at present has been identified as one of the
constraints for development of liquid milk production in the country. Further, strengthening of
agro-processing industry by providing financial facilities for agro-based industries, storage and
processing of crops would help to develop the cultivation of food crops on a sustainable basis.
Accordingly, this credit programme will increase the investments in the local liquid milk and food
crop sectors in the country.
It is expected to assist the farmers to deviate from traditional farm practices and to adopt modern
scientific animal husbandry practices by providing financial assistance under the credit
programme. Accordingly, it is compulsory to construct modern cattle sheds to keep the animals
inside instead of allowing them to roam in the field. Further, a part of the loan funds could be
utilized to feed the cows with concentrated feed, grass and fodder with adequate water and
required veterinary care too. Farmers are allowed to keep local breeds, or cross breed and if
available they could purchase hibreed animals too with the loan funds. However, the loan limit
will be determined on the basis of the veterinary surgeon’s recommendation on the capacity of
each farmer. The veterinary surgeons will examine the experience of the farmer, availability of
water and fodder and other necessaries when they issue such recommendations. Further, the
CBSL in association with lending banks will make arrangements for Forward Sales Contracts
(FSCs) between the dairy farmers and milk collecting companies to ensure a stable market with a
remunerative price for liquid milk.
Loans could be obtained for the following purposes:
1.
Construction of cattle sheds
2.
Purchase of cows
3.
Purchase of concentration feed, veterinary services and drugs etc.
4.
Construction of bio-gas tanks
5.
Any other requirements recommended by veterinary surgeons.
The loan limits extend from Rs.50,000 to Rs.400,000 per borrower at an interest rate of 12
percent per annum. The maximum repayment period is 5 years.
In addition to the above, liquid milk processing industries are also eligible to receive bank loans
under the credit programme up to a maximum of Rs.300 million per industry. Interest for such
loans will be 14 percent per annum and a maximum of 5 years is available for repayment. Such
an industry is required to make an arrangement with 2,000 to 10,000 dairy farmers to purchase
liquid milk under FSCs.
Further, agro-based industries are also eligible to receive loans at 14 percent per annum under the
credit programme up to a maximum limit of Rs.300 million per borrower. Such industries are
required to enter into FSCs with 1,000 to 10,000 farmers to purchase their produce. The CBSL
and lending banks will assist the industries to enter into FSCs with farmers.
The loans are available for the following purposes:
1.
Construction of industrial buildings/modernization
2.
Purchase of modern machinery and equipment
3.
Storage, cold rooms and transportation services
4.
Other required services, equipment for maintenance of standards.
The loans would be available from the following Participating Financial Institutions (PFIs) under
the Loan Scheme:
Bank of Ceylon
Ruhuna Development Bank
People’s Bank
Wayamba Development Bank
Hatton National Bank
Kandurata Development Bank
Commercial Bank
Rajarata Development Bank
Sampath Bank
Sabaragamuwa Development Bank
Seylan Bank
Uva Development Bank
Lankaputhra Development Bank
SANASA Development Bank
The Government provides an interest subsidy at 5 percent per annum to PFIs enabling them to
keep the on-lending rates lower as given above.