The Government says its intention is to integrate SMEs into the formal sector and also to establish hard and soft infrastructure frameworks to facilitate their growth.
Sri Lanka is to take measures to improve access to credit, access to markets, and encourage integration of value chains connecting SMEs and large firms.
The Government said it will encourage project-based lending rather than collateral based lending, rationalize upfront taxes that hinder expansion, and encourage knowledge sharing between R & D institutions and SMEs.
Finance Minister Mangala Samaraweera said this at a forum organised by the Asia-Pacific Rural and Agricultural Credit Association held at the Hilton Colombo today.
He said that globally, SMEs represent a significant component of all enterprises. In Sri Lanka, the majority of companies are of the SME category and contributes the bulk of employment as well.
“Every country in the world has identified the importance of SMEs in their economies as a practical instrument in achieving sustainable economic growth. Nevertheless, they persistently face difficulties in setting-up and running businesses. In fact, in most surveys done around the world, access to finance is a striking obstacle faced by SMEs, and this is no different in Sri Lanka and the rest of our region,” he said.
With regard to SMEs, the Sri Lankan Government’s intention is to integrate SMEs into the formal sector and also to establish hard and soft infrastructure frameworks to facilitate their growth.
Samaraweera said the Government has identified the importance of the SME sector and initiated the ‘Enterprise Sri Lanka’ scheme to address some of these obstacles and minimise the SME finance gap in Sri Lanka.