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Finance Minister elaborates measures put in place to prevent layoffs and mass unemployment

Date: May 05, 2020
Domain:Economy & Finance; Employment/Labour
Persona: Business; Citizen; Government; Non-Citizen

GIS ​- 05 May, 2020: Government has initiated a series of measures since the beginning of the crisis so as to avoid waves of mass layoffs while supporting the production capacity. Government is and will remain focused on the economic and social development of the country to help prevent mass unemployment but also preserve the productive capacity of our economy to start the recovery.

The Minister of Finance, Economic Planning and Development, Dr. Renganaden Padayachy, made this statement today in the National Assembly in reply to a Parliamentary Question with regards to measures put in place for enterprises presently encountering economic difficulties and to prevent mass unemployment after the lifting of the curfew order.

Dr. Padayachy elaborated the various measures which demonstrate the unwavering commitment of Government towards the Mauritians. They are: (i) the Bank of Mauritius (BOM) Support Programme; (ii) the Business Support Plan; (iii) the Wage Assistance Scheme for employees; and (iv) the Self Employed Assistance Scheme for the self-employed.

With regard to the Bank of Mauritius Support Programme, he highlighted that the BOM has introduced exceptional assistance in the form of loans through commercial banks. This measure, he added, with an envelope to the tune of some five billion rupees makes provision to meet the cash and working capital needs of economic operators who are severely affected by the Covid-19.

In an effort to ease the strain on the country's economic players, the BOM has also eased its guidelines to allow commercial banks to grant a six-month moratorium on the repayment of capital for pre-existing and contracted loans by companies a fortiori affected by the Covid-19.

In addition, the BOM has requested commercial banks to grant households a six-month moratorium on the repayment of housing loan and BOM will cover the interest owed by households for the period April 1 to June 30, 2020. This measure, he added will thus protect the purchasing power of households and alleviate consumer expenditure until economic recovery. Besides, the BOM has also made available a special line of credit in foreign currency of an amount of US $ 300 million equivalent to Rs 12 billion to support operators with foreign currency needs. As for companies dependent on imports, the BOM has set up an exchange swap agreement between the dollar and the rupee with commercial banks for an amount of $ 100 million. This agreement will also allow the import-oriented businesses to benefit from support for their foreign currency needs.

As for the business support plan, the Finance Minister announced that Government has proposed a series of complementary measures namely to encourage commercial banks to lend to businesses experiencing economic difficulties. The State Investment Corporation(SIC), he said, will provide them with the following guarantees: (i) for economic operators whose turnover is less than or equal to Rs 50 million (ie SMEs), the SIC provides a guarantee of 60% of the credit facilities; and (ii) for economic operators with a turnover exceeding the threshold of Rs 50 million, the SIC will provide for a guarantee of up to 50% of credit facilities.

For companies whose annual turnover does not exceed Rs 10 million and cannot obtain financing from commercial banks, Minister Padayachy underlined that the Development Bank of Mauritius Ltd will provide them with working capital of Rs 1 million per company for which an overall sum of one billion rupees has been earmarked under the scheme.

The State Investment Corporation Ltd and the SME Equity Fund Ltd will in addition provide equity financing to companies in order to improve their debt ratio and, as a result, their access to loan facilities. An amount of Rs 4 billion has been earmarked for this purpose.

Government Information Service, Prime Minister’s Office, Level 6, New Government Centre, Port Louis, Mauritius. Email:  Website:  Mobile App: Search Gov

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