Financial Times

FCCISL urges creation of Eastern Development Bank to spur development

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) along with their affiliated district Chambers are pushing the government to focus on developing the East. An FCCISL press release stated that indigenous business, industrial and agricultural communities in the micro, small and medium strata are showing their keenness to come into the mainstay of the economic activities that are going to be reviewed by the government along with the private sector in the liberated East.

FCCISL Secretary General Samantha Abeywickrama said the Cabinet is expecting big investments in the East by large-scale investors and foreign parties. The Board of Investment (BOI) wants to convene a meeting of BOI investors to highlight the facilities and resources available in the East for large scale investments.

Mr. Abeywickrama said that while the private sector appreciates the government's intentions to attract large scale investors, the FCCISL feels greater emphasis should be placed on small and medium scale investors and local investors from the East. He added that the government has not really extended an opportunity to attract the small scale category of investors.

He added that government agencies should also create greater awareness among the small and medium entrepreneurial community in the East about the economic revival that is to take place and the opportunities that will be available for them.

The press release stated that a major hindrance for these micro, small and medium scale entrepreneurs has been the lack of borrowing facilities. Private banks normally charge the usual interest rate and also call for collaterals. The regional and district chambers and others who are keen to develop the East insist that an Eastern Development Bank should be set up to facilitate financial backing with concessions, specifically targeting SMEs.

Entrepreneurs from the East have pointed out that the Development Banking process has been in force elsewhere in the country and is necessary if the government is keen to develop the East. According to the press release, they have pointed out that the Central Bank (CB) has transferred the funds to the government to set up an Eastern Development Bank in 2002. The FCCISL stated that a CB official confirmed that the share capital that was with them to set up the Eastern Development Bank was transferred to the government and they do not have any hold in the setting up of the Eastern Development Bank.

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