Industry Ministry enlists German push for 18,000 rural economy distributors linking to 1.4 m Lankan

Sri Lanka has successfully enlisted German support for 18000 marginalised rural entrepreneurs in the country. More importantly, the much needed support is expected to directly uplift purchasing agents in remote regions who are no less than the first point of product distribution for more than 1.4 Mn rural household ‘economic units’ across the country.

Sri Lanka’s National Enterprise Development Agency (NEDA) under the Ministry of Industry and Commerce has now been informed of prospective German support towards its regional entrepreneur uplifting initiative aimed at creating a bankable village entrepreneur.

 “This is a powerful shot in the arm for 18,000 marginalised entrepreneurs in geographically difficult regions in Sri Lanka. The focus at present is mainly on micro and small scale entrepreneurs –the purchasing agents in rural areas – on whom our rural household producers largely depend on but who are marginalised from our banking infrastructure” said Minister of Industry and Commerce Rishad Bathiudeen on 3 November.

The Minister announced this in the aftermath of his successful discussions with Colombo’s German Development Cooperation (GIZ, formerly GTZ) team held in Colombo on 3 November.  

The GIZ team was led by Dr. Friedrich Liehr, Country Director of GIZ Sri Lanka. The other members of the team were Ms Andrea Grimm (First Secretary, German Embassy in Colombo) and German Muller (Senior Advisor, GIZ Sri Lanka).

GIZ currently mandated to support the German Government’s objectives in the field of international cooperation for sustainable development and is also engaged in international education work around the globe.

 “We have now successfully enlisted support for current and future entrepreneurs in far regions of Sri Lanka” said Director of NEDA Lakshman Wijeyawardena.

“The micro and small scale purchasing agents and entrepreneurs in difficult geographic areas such as Nuwara Eliya and Monaragala Districts are playing a crucial role in the distribution but are on a continuous struggle to run their enterprises since banks do not accommodate them due to lack of collateral. We will also look into overcome this issue in addition to strengthening their capacity,” Wijeyawardena said.

“Our initial support target is 18000 rural entrepreneurs but we are ready to increase the numbers when more funds become available” Wijeyawardena said.

The micro and small scale vendors play a vital role in Sri Lanka’s rural supply chains. The bulk of the household produce based on such government sponsored large scale programmes as “Divi Neguma” where one million rural household units are boosted, are often first purchased by these micro and small vendors, thereby these vendors becoming the rural economies’ entryway to the supply chain.

If these entrepreneurs continue to struggle and collapse, then the village economies could find themselves off-grid. Realising the implications of such a scenario, Industry Ministry’s NEDA bagan pushing to strengthen the rural micro and small vendor layer, and has now successfully enlisted German government support as part of its efforts.

According to data by Sri Lanka’s Ministry of Economic Development, 1,455,187 households (called as “home economic units”) are taking part in its “Divi Neguma” programme. 1,356,594 home garden units and 94,011 livestock farming units are already functioning under this programme, according to the Ministry of Economic Development. Among the back-yard economic activities of Divi Neguma are agriculture, fisheries, livestock  and small family enterprises.

The NEDA – GIZ collaboration, aimed at making regionally marginalised entrepreneurs bankable and bringing them to mainstream economic process, will initially investigate the viable micro and small businesses in the rural areas followed by identification of geographic locality potentials.

Identification of potential entrepreneurs and training them on such aspects as book keeping and business planning will follow thereafter.

 According to GIS Sri Lanka, the German Development Cooperation with Sri Lanka is geared towards a future oriented, sustainable development.

“This is an advanced project. We may support NEDA through Phase II of GTZ ProMIS Project” said Dr. Liehr, Country Director of GIZ Sri Lanka. German Muller (Senior Advisor, GIZ Sri Lanka) said: “Through this initiative we target to strengthen even the marginalised through microfinance. We will support forming credit groups and help such regionally marginalised entrepreneurs to access micro credit.” Also present during the meeting were two advisors to the Minister of Industry and Commerce – Mr. M Vamadevan  and Ms Himali Jinadasa.