Concessionary pledge loan scheme of Rs.10bn to support paddy millers from January 2026

• The scheme will target SME paddy millers and cooperative societies with a daily milling capacity of up to 25MT

By Shannine Daniel

A concessionary pledge loan scheme for small and medium scale paddy millers and cooperative societies is to be implemented from 1 January onwards to purchase paddy for the Maha season 2025/2026.

The loan scheme, which will include a concessionary interest rate, will be implemented to maintain a reasonable price for paddy farmers’ produce. 

The target group of this loan scheme is SME paddy millers and cooperative societies with a daily milling capacity of 25MT. 

All borrowers must have a valid business registration from a relevant government institution, and a license issued by the Paddy Marketing Board. 

Under this loan scheme, SME paddy millers and cooperative societies can obtain loans up to Rs. 50 million at an interest rate of 7 percent annual interest.

The respective loans should be re-paid within 180 days. 

Under this loan scheme, roughly Rs. 10,000 million will be disbursed as loans by the selected participatory financial institutions (PFIs) for Maha season 2025/2026. 

The following banks have been selected as PFIs: Bank of Ceylon, People’s Bank, Regional Development Bank, Seylan bank PLC, Hatton National Bank, Sampath Bank, Commercial Bank of Ceylon, DFCC Bank, National Development Bank, Nations Trust Bank, Sanasa Development Bank, Amana Bank, Cargills Bank, Pan Asia Banking Corporation and the State Mortgage and Investment Bank. 

This loan scheme is an initiative of the Development Finance Department of the Finance, Planning and Economic Development Ministry. 

The department will be purchasing the paddy at a minimum purchase price declared by the Agriculture Department. 

As reported by the Daily Mirror in November last year, National Agrarian Union Chairman Anuradha Tennakoon had challenged the proposed 2026 Budget.

He claimed that the Budget had ignored farmers, the agriculture sector and the agriculture production economy.

He also stated that farmers had been “challenged with selling their produce at reasonable prices due to the middlemen mafia and other interferences.”

He called on the current government to strengthen small and medium scale rice mill owners, which previous governments had not done.

He added that most of the budget allocations did not seem to be practical, nor did the budget prioiritise the agriculture sector.

In the first reading of the 2026 Budget, Rs. 15,000 million was allocated for the concessionary pledge loan scheme for small and medium scale paddy millers and cooperative societies.

Source : DailyMirror