Sri Lankan migrant workers can borrow between Rs. 500,000 and Rs. 10 million for housing under a new “Ethera Diriya” loan scheme launched by the Sri Lanka Bureau of Foreign Employment (SLBFE), with the Bureau reimbursing part of the interest.

The scheme was launched on Thursday with the signing of memoranda of understanding between the SLBFE and two banks — DFCC Bank and Union Bank — the Daily Mirror reported. The Bureau said MoUs would follow with nine more banking institutions, bringing the total to 11.

Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath and Housing, Construction and Water Supply Minister Dr. Susil Ranasinghe attended the signing, along with Deputy Minister Arun Hemachandra and SLBFE Chairman Kosala Wickramasinghe.

The terms

Loans are repayable over a maximum of 10 years. The maximum interest rate considered under the scheme is 15% per annum — where a participating bank charges more than 15%, the borrower bears the excess.

The SLBFE will reimburse an eligible portion of the interest to the bank under an approved reimbursement scheme. The government has allocated Rs. 126 million for that purpose in 2027.

How it works

Applicants apply through a participating bank, which independently assesses eligibility, repayment capacity, creditworthiness and collateral. Pre-approved applications go to the SLBFE, which verifies the applicant’s registration with the Bureau, foreign employment status and remittances.

Banks remain responsible for approving, disbursing and recovering the loans. They must submit repayment confirmations, interest calculations and reimbursement claims to the SLBFE every six months; verified reimbursements are credited to the loan account.

NewsFirst reported the launch on Friday, giving the loan range and the 10-year term but not the interest ceiling, the reimbursement allocation or the participating banks.

Context

The scheme is narrower than the multi-purpose SLBFE loan facility announced on 8 September, which covered housing, business, vehicles and children’s education. Neither report says whether Ethera Diriya replaces or sits alongside that facility, or alongside the Bureau’s existing housing arrangements.

Minister Herath put remittances at around US$8 billion a year in a separate statement this week on migrant worker death compensation.

Update — 17 September: what the money may be used for

DFCC Bank has since set out its own terms under the scheme, in an announcement carried by Colombo Gazette on 17 September. It answers a question the launch reports left open: the financing may be used to construct, purchase, renovate or improve a residential property — a wider permitted use than construction and purchase alone.

The bank confirmed the Rs. 10 million ceiling and the 10-year maximum repayment period, and described the SLBFE interest reimbursement as giving eligible borrowers “financial relief through the applicable interest subsidy.”

DFCC named the signatories to its memorandum as Asitha Pinnaduwa, Vice President and Head of Products and Propositions, Retail and Business Banking at DFCC Bank PLC, and the SLBFE Chairman, whose name the bank renders Koshala Wickramasinghe — the Daily Mirror’s launch report spelled it Kosala.

“Hundreds of thousands of Sri Lankans work overseas to create a better future for their families,” Pinnaduwa said. “Through Ethera Diriya, we want to help them convert that effort into a secure home and an asset that will serve their families for years.”

The announcement is DFCC’s own corporate communication rather than independent reporting, and sits alongside the bank’s existing migrant-worker products, including its RataViru savings account. It covers only DFCC’s participation — not the scheme as a whole.

Not reported

Neither outlet names the nine banks still to sign, gives a target number of borrowers or a total lending volume, states what share of interest the SLBFE reimburses, or says when the first loans will be disbursed. Neither explains why the reimbursement allocation is budgeted for 2027 rather than the current year. DFCC’s own announcement does not give its interest rate under the scheme, state whether land purchase alone qualifies, or set out the security or guarantor arrangements for a borrower working overseas.

Sources