SL’s first-ever study on SMEs
View(s):Sri Lanka’s first ever nation-wide study on the country’s SMEs has recommended an apex SME Advisory Commission integrating the three top national SME institutions under one roof.
It also recommends Sri Lanka’s first ever SME Industrial Zone, a national SME portal ‘e-platform’, and an SME-only licensing agency on the lines of the Board of Investment (BoI).
“I wish to thank the German development agency GIZ office in Sri Lanka for extending financial support for this initiative. This study focuses on three aspects-they are the current business environment relating to Small and Medium Enterprises in Sri Lanka the prevailing Institutional Framework supporting the sector and the Regulatory Framework that relates to the SMEs” said the Minister of Industry and Commerce Rishad Bathiudeen.
He was addressing the special presentation of the second draft report of ‘Legal and Institutional Study for Creating an Enabling Environment for SMEs’ – a study commissioned by the Ministry of Industry and Commerce at a cost of Rs. 3.2 million and conducted by Ernst & Young (E&Y) also focusing on the creation of a more conducive environment for SMEs while transforming them to large scale sustainable business enterprises and linking them to export markets, according to a Ministry media release.
The validation event was joined by Secretary to the Ministry of Industry and Commerce K.D.N. Ranjith Ashoka, Additional Secretary to the Ministry M.A. Thajudeen, Chairman Director General of NEDA Dakshitha Bogollagama, E&Y Senior Partner Arjuna Herath, GIZ Sri Lanka’s Hasitha Wijesundara, and representatives from participating Ministries, institutions and SME sector.
The release said that the pioneering national survey covered 20 Ministries that serve the business sector with over 90 of their Departments, authorities and councils established under them. The legal review of the study includes laws and regulations applicable to SMEs in no less than 15 aspects.
Addressing the event, Minister Bathiudeen stressed: “There are more than one million registered SMEs in Sri Lanka providing employment to three million. When we take the unregistered SMEs the numbers will be much more. Fifty two per cent of our GDP is driven by this sector with more than 40 per cent of employment. Also more than 70 per cent of enterprises are SMEs and in 2013, 20 per cent of the exports came from SMEs. Given the importance of SMEs in our economy we worked on the National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka and recently concluded first UNESCO-APEID event in Sri Lanka which was a first in South Asia. All these initiatives -including today’s assessment study -serve the reform vision of Unity government to link our SMEs to global markets.”
Among the key recommendations of the study are an apex SME Advisory Commission for the country bringing the three top institutions active in entrepreneurship (NEDA, IDB and SED-Small Enterprise Development) under one umbrella that would transform to a Sri Lanka SME Authority –the apex SME body for national level coordination of the critical sector in economy-the SMEs. The study also recommends an SME Industrial Zone, an e-platform to manage SME market supplies, and a one stop licensing agency similar to BoI for all SME licensing needs.
Ministry Secretary Mr. Ashoka said that SMEs are a key component of an economy even in developed markets. “These enterprises are more than 90 per cent of all business enterprises in countries like Japan, Sweden and Singapore. Even in SAARC countries such as India and Pakistan, they are at similar levels.” Additional Secretary Mr. Thajudeen said: “The National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka- is now on the web at neda.gov.lk. It is not a document set in stone but is subject to review every once in three years. We call for your active participation in developing it further.”