Sri Lanka’s SMEs to integrate into the formal sector: Mangala

Sri Lankan government’s is to integrate SMEs into the formal sector and also to establish hard and soft infrastructure frameworks to facilitate their growth

Measures are being taken to improve access to credit, access to markets, and encourage integration of value chains connecting SMEs and large firms.

This was stated by Finance Minister Mangala Samaraweera when he delivered the inaugural address at the Asia-Pacific Rural and Agricultural Credit Association (APRACA) on 8th October 2018 at Hilton Colombo.

The Government 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.

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.

Some of the issues targeted by this programme would be to make market interest rates more affordable by subsidising interest payments and addressing the pervasive issue of, lack of collateral, he said.

Youth unemployment is addressed partly by enabling young graduate’s to start-up companies, through access to interest free loans.

There are several subsidised loans for the agricultural sector, at various points of the value chain, in an effort to improve productivity and value addition in that sector, he added.