SME incubator campaign pivotal step to economic growth: Lakshman Abeysekera

Thursday, 27 February 2025 09:00 - - {{hitsCtrl.values.hits}}

NEDA Chairman Lakshman Abeysekera emphasises that efforts are being made to support SMEs
SME incubator campaign will be implemented through a public-private partnership (PPP) model
Other SME oriented strategies include the potential establishment of an SME development bank and credit guarantees on loans

NEDA Chairman Lakshman Abeysekera

At the CMA Budget forum held last week at Taj Samudra, Colombo, it was revealed that the Ministry of Industries is set to launch a nationwide SME incubator campaign, supported by a Rs. 1 billion allocation for R&D commercialisation in the 2025 Government Budget.

National Enterprise Development Authority (NEDA) Chairman Lakshman Abeysekera said that these programs will initially be implemented through a public-private partnership (PPP) model, and will incorporate a people’s partnership component in the later stages.

He stated, “Our aim is to support the commercialisation of innovation. We will be collaborating with universities and private companies to launch this program. This will be one of our foundations for the year.”

Beyond the incubator campaign, the Industries Ministry is attempting to revive the development of SMEs with the support of the Asian Development Bank. According to the Asia Development Bank, he said around 75% of all active enterprises in the country are SMEs and they contribute to approximately 52% to the country’s GDP and employ about 45% of the population. The Asian Development Bank had earlier in 2024 approved a $ 100 million loan to support MSMEs in Sri Lanka. Through participating in financial institutions, it had opened a $ 50 million line of credit for underserviced SMEs. It will also establish a $ 500,000 special facility to cover guarantee subsidies for women-led SMEs.

“These steps will drive innovation and job creation, eventually stimulating domestic demand. Financial inclusivity to SMEs signify that they will be empowered to successfully contribute to Sri Lanka’s GDP further, driving economic growth,” he opined.

Other SME oriented strategies include the potential establishment of a SME development bank aimed at fostering entrepreneurship via enhanced access to financing options. In addition, the National Credit Guarantee Institution (NCGI), the institution along with the Asian Development Bank will provide credit guarantees on loans to SMEs via participating financial institutions. The institution will also provide services such as underwriting guarantees, managing risks through risk-based pricing to ensure guaranteed recovery operations.

Speaking about the initiatives, the NEDA Chairman stressed. “We are currently working on the modalities of establishing this fund.”

“Parallelly, the ministry is trying to set up an SME loan facility with a consortium of banks. The Bank of Ceylon (BOC) has already agreed to a Rs. 5 billion loan facility in this regard. We are in discussion with the Regional Development Bank for a similar facility. Similarly, the ministry will discuss with other government banks such as the People’s Bank, the National Savings Bank, etc. This will be for seed funding without collateral for SMEs,” he added.

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