Banks will have to slash SMEs interest rates to below 4% – Pres Ali

…as Govt prepares zero-interest development bank

President Dr Irfaan Ali has announced that commercial banks will soon have to lower their interest rates to below four per cent as well as their collateral requirements for small and medium-sized enterprises (SME).
“A special incentive regime will be created to support lending to SMEs by the commercial banks, similar to the incentives we give them for housing. In exchange, the commercial banks will have to lower their interest rate to lower than four per cent and also lower their collateral requirement for SMEs,” President Ali said while addressing the opening of GuyExpo on Thursday evening. He spoke of the Government’s campaign promise of launching a development bank, noting that works have already started and that the facility should be operational next year.
The bank will be capitalised with a minimum of US$200 million.
“It will become operationalised before the end of the first quarter in 2026. As I speak to you, the administrative, legal and regulatory framework is being crafted. The bank will be dynamically integrated with the commercial banks to leverage and unlock capital,” he noted. The bank, the President added, will have no collateral requirement and zero per cent interest on loans up to a predetermined value to be announced in Budget 2026. “The bank will focus heavily on the agriculture sector, the tourism sector, services sector and any sector, any activity that deals with value creation. This, of course, will lead to the creation of thousands of business opportunities, tens of thousands of business opportunities,” the President noted.
Additionally, he said the Government will soon announce a special initiative through the Ministry of Human Services and Social Security that will convert more than 1000 women, who were trained under the Women’s Innovation & Investment Network (WIIN) programme, entrepreneurs.