Private Sector Relief Scheme |14 May 2020
Mr Edmond (Photo: Jude Morel)
R500m credit line to assist MSMEs
The Central Bank of Seychelles (CBS) is making available R500 million as credit line facility under the Private Sector Relief Scheme to help micro, small and medium enterprises (MSMEs) impacted by COVID-19.
The people concerned will access this facility through their commercial banks, Seychelles Credit Union and the Development Bank of Seychelles (DBS).
Only businesses earning up to R25 million per annum and which are not defaulters on any existing loan repayment will be considered. The lending rate will be 1.5% per annum.
This was announced by the first deputy Governor of CBS, Christophe Edmond, yesterday in a press conference at ICCS.
“The ‘Private Sector Relief Scheme’ has been established and financed by CBS. The core objectives of this scheme is mainly to assist eligible MSMEs facing financial constraints resulting from the COVID-19 pandemic in meeting their critical expenditures, including: payment of rent, utilities, salaries, taxes, and goods and services contracts to the extent not covered under other public measures,” explained Mr Edmond.
What are the eligibility criteria? “Only MSMEs engaged in economic sectors impacted by COVID-19 are eligible to this loan. Applicants’ existing loan facilities must be in good order at the end of February 2020, at a minimum. If you were not on time with your loan payment before February 2020, it cannot be because of COVID-19. All applications are subject to credit assessment which is different for each bank. If the business is being supported by the government, it will not be eligible for such a loan.”
Mr Edmond explained that this facility does not apply to big businesses and if ever they are having difficulties they have to go to their respective banks for negotiations.
“CBS already engaged with the commercial banks for them to look at the big businesses who are impacted by COVID-19. We suggested to the banks to review the interest rates they are offering to the big businesses as they might also find some difficulties during this period. The reason why we did not include the big businesses is because they can negotiate with their banks. But if the situation does not improve, we will have to look into how to assist big businesses as well. This will require more consultation internally.”
New businesses that have not even started yet like guest houses and others should contact their respective banks to see if they are eligible for such a loan.
Conditions
Mr Edmond noted that the lending rate will be 1.5% per annum and the maximum tenor of 3 years inclusive of 6 months moratorium (interest and principal) for loans.
“This facility will be provided as loans or overdrafts and the amounts borrowed by the clients must be of sufficient amount to cover the critical expenditure of a borrower for a period of 6 months. Each bank will be able to give the loan facility for a maximum of three years only according to the law. As a business it is important to access your repayment facility in order to be in debts.”
The applicants should contact their respective commercial bank, DBS or SCU to be informed on the required documents. They will have to submit their written application with supporting reasons, forecast cash flow statement for at least six months and their latest tax return.
Vidya Gappy