COLOMBO, March 17 (Xinhua) -- Sri Lanka's ministry of finance on Friday said it will provide a 1.1 million-rupee (about 3,200 dollars) interest-free loan each for 5,000 students who have financial difficulties in affording education at a state university.

State Minister of Finance Ranjith Siyambalapitiya said the scheme was introduced because bank loans are issued at a rate as high as 25 percent.

Students can apply for the loan at three state-run banks -- the Bank of Ceylon, People's Bank and the National Savings Bank.

The loan must be repaid after students find jobs, the state minister said.

Around 270,000 students sit for the university entrance exam each year and about 40,000 students are enrolled into state-run universities.