The ‘Ethera Diriya’ Migrant Workers Housing Loan Scheme was launched on Thursday, 10 September, offering Sri Lankans working abroad housing loans of Rs. 500,000 to Rs. 10 million with part of the interest reimbursed by the Sri Lanka Bureau of Foreign Employment (SLBFE).
The scheme was opened with the signing of Memoranda of Understanding between the SLBFE and two banks — DFCC Bank and Union Bank — in the presence of Vijitha Herath, Minister of Foreign Affairs, Foreign Employment and Tourism, and Dr. Susil Ranasinghe, Minister of Housing, Construction and Water Supply, the Daily Mirror reported.
The Bureau said MoUs will follow with nine more banks, bringing the total to 11 participating institutions.
Terms as launched
- Loan size: Rs. 500,000 to Rs. 10 million
- Repayment period: up to 10 years
- Interest ceiling: the maximum rate considered under the scheme is 15% per annum. Where a participating bank charges above 15%, the borrower bears the excess
- Subsidy: the SLBFE reimburses an eligible portion of the interest to the bank, under an approved reimbursement scheme
- Government allocation: Rs. 126 million for 2027
- Where to apply: through a participating bank
How it works
Applicants apply to a participating bank, which independently assesses eligibility, repayment capacity, creditworthiness and collateral and decides whether to approve the loan. The bank carries the full credit risk — it approves and disburses the loans and recovers repayments.
Once pre-approved, the application goes to the SLBFE, which verifies the applicant’s registration with the Bureau, foreign employment status, foreign remittances and scheme eligibility.
Banks must submit loan repayment confirmations, interest calculations and reimbursement claims to the SLBFE every six months. After verification, the reimbursement is credited to the borrower’s loan account.
Deputy Minister of Foreign Affairs and Foreign Employment Arun Hemachandra and SLBFE Chairman Kosala Wickramasinghe also attended the signing.
Reading the design
The 15% ceiling is the term that determines who benefits. It caps the state’s exposure rather than the borrower’s: a bank remains free to price above 15%, and the borrower — not the Bureau — absorbs the difference. The subsidy is therefore a partial buy-down of a market-rate loan, not a concessionary rate.
The Rs. 126 million allocation for 2027 is modest relative to a Rs. 10 million maximum loan, which indicates the scheme is sized around the interest subsidy on a limited book rather than around large-scale lending.
Requiring verified registration and remittance history ties eligibility to using formal channels — consistent with the long-standing policy aim of drawing migrant earnings into the regulated banking system. Opening it to private as well as state banks should widen access for workers whose accounts sit with commercial lenders.
Still unstated
The reports do not name the nine banks still to sign, give the total lending target or expected number of borrowers, or state what share of interest the SLBFE actually reimburses. They do not say whether the loan may be used for land purchase or only for construction and purchase, what security or guarantor arrangements apply to a borrower working overseas, or whether ‘Ethera Diriya’ replaces or sits alongside the SLBFE’s existing housing loan facility. No allocation figure is given for 2026.
