SMEs demand financial help to survive
Sri Lanka’s Small and Medium enterprises need the financial support and push from the government to sustain itself as the sector continues to be sidelined by banks for loans as most are found to be in debt.
Small and Medium Industries Chamber (SMIC) President Prof. Rohan De Silva said that even loans that were specifically meant for the SME sector were not received and progress is “very slow” by the government.
The SME sector contributes 52 per cent of the GDP and employment for over 45 per cent of the private sector.
He noted that most often these new loan schemes including credit guarantee schemes have been given out by banks to customers of their preference.
The SMIC clearly stated that the government needs to take charge of the situation and resuscitate the sector.
In this respect SMEs need to have access to finance as this remains their biggest challenge.
Special attention needs to be given to start-ups, women-led enterprises, rural businesses, and export-oriented SMEs.
In addition digital transformation is required to compete in the modern economy, thus making SMEs digitally empowered.
Market access and export promotion is needed for SME growth in addition to capacity building and training.
Reliable infrastructure is essential for SME productivity and to prioritise industrial zones for SMEs. Regulatory support and ease of doing business with digital platforms is needed to reduce bureaucracy.
Sustainable practices must be adopted to ensure SMEs remain competitive in both local and global markets. Public private partnerships should be established that will enable platforms for dialogue and cooperation.
Currently the condition of the SME sector is “very bad”, Prof. De Silva said as most industries are in the NPL (non-performing loan) category.
He explained that the government needs to understand that supporting the SME sector is an investment for the future of the economy of the country.
Further, he pointed out, that job losses have been taking place on a rapid scale with the closure of a number of SMEs and most skilled labour is leaving the country.
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