(Seychelles News Agency) - Small business owners in Seychelles are having mixed reactions to a credit line facility put in place by the Central Bank to help micro, small and medium enterprises impacted by COVID-19.

The credit line worth SCR500 million ($28 million) is accessible through commercial banks as well as the Seychelles Credit Union and the Development Bank of Seychelles (DBS).

Business owners have to submit their written applications to their respective banks with supporting evidence, including a cash flow forecast and their latest tax returns.

Roger Morel, the owner of a shop selling garments, told SNA on Thursday that due to the fact that his business is down the loan facility has come at an opportune time to help out. 

"I did not get much details on the formalities to apply for the loan and I do not know the limit of how much you can apply for, but I think it will be a good relief for businesses," said Morel.

He said that businesses should plan properly before taking the loan given the uncertainty in the world.

The first deputy governor of Central Bank of Seychelles (CBS), Christophe Edmond, told a press conference on Wednesday that the scheme is to help these small enterprises to meet their critical expenditures.

"This includes payment of rent, utilities, salaries, taxes, and goods and services contracts to the extent not covered under other public measures," said Edmond.

He added that "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 six months. Each bank will be able to give the loan facility for a maximum of three years only according to the law."

A gift shop owner, Heather Longhurst, said she is going to apply for the loan and it is a good initiative by CBS to put it at a low-interest rate.

The lending rate will be 1.5 percent per annum and the maximum tenor of 3 years inclusive of 6 months moratorium. Only businesses earning up to R25 million ($1.4 million) per annum and which are not defaulters on any existing loan repayment will be considered.

Longhurst agreed to this and said that this is very good as the loan should be left for small businesses as they are the ones that need more support.

She said that perhaps a small issue will be that if the loan is being disbursed in rupees, the depreciation of the rupees against foreign currencies will make it even more difficult to import their goods.

The owner of a souvenir shop, Maxime Payet, is of the view that there is a lot of complications with the formalities in place to get the loan.

"The issue is that the money that you are requesting is not being disbursed to you at one go. The bank is controlling the money and you will need to go back as and when you need a certain amount of money to pay your bills or rent," said Payet.  

He added that "the government is telling you to rethink your business model. I am in a tourism-related business and for the fact that this sector is experiencing difficulties due to COVID-19, I see the need to diversify and reinvent as well. I thought I could get the money to reinvest in another thing to get the business going. None of this is the case."