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Private sector relief lines of credit guarantee to remain as is | 09 January 2021

The government guarantee on the two lines of credit – the Private Sector (MSMEs) Relief Scheme and Private Sector (Large Enterprises) Relief Scheme – financed by the Central Bank of Seychelles (CBS) is to remain as is at 70 percent and 50 percent respectively, it was announced yesterday by CBS Governor Caroline Abel.

The relief scheme, implemented by CBS in 2020 as a measure to support eligible MSMEs and large business enterprises through the Covid-19 pandemic, is administered by commercial banks and the Development Bank of Seychelles (DBS) and guaranteed by the government, and serves to provide them with finance for their day-to-day operating expenditures, including payment of rent, utilities, salaries, taxes, goods and services contracts, to the extent not covered under other measures announced by government.

“After lengthy discussions with the Ministry of Finance, and their analysis, they returned to us to inform us that they do not have the ability to consider an increase on the guarantee to 100 percent, or a bit lower, on account that the budget is tight and the ability to accumulate debt is also important to them as it is one of the expenditure elements that government needs to consider. Considering the priorities, the government does not feel that it is in a position to increase the level of guarantee on the lines of credit.”

Up to December 15, 2020, 318 applications had been lodged for the MSMEs private relief scheme to a sum just above R140 million of which 188 have been approved to a sum of just above R70 million. A total of 68 requests had been rejected while 36 were still pending.

As at January 7, the total value of approved and disbursed requests totalled in at R59.4 million, representing 11.89 percent of the R500 million made available to MSMEs.

As for the scheme for large enterprises, a total of 17 requests had been received, the majority of which has been approved. Three applications for a total value of R8.7 million were withdrawn after the re-opening of the Seychelles International Airport as large enterprises resumed operations. As such, the total value of the 12 approved requests is R79.3 million.

In total, since the establishment of the scheme, CBS has received 9 requests from commercial banks and institutions administering the scheme, to a sum of R76.8 million, representing 10.23 percent of the available R750 million.

 

Laura Pillay

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