Rs. 5.7 b windfall for Lankan SMEs

As Sri Lanka works to enlist its million-strong SMEs in its middle income climb, it is also quietly bolstering the sector by directly intervening in a thorny issue - SME financing.

“Our Government is working to make Lankan SMEs a strategic partner in its journey towards the higher middle income ranks,” said Industry and Commerce Minister Rishad Bathiudeen. 

“The National Enterprise Development Authority (NEDA) and SMILE-3 program under my ministry have already started moving in this regard.”

Minister Bathiudeen was addressing the 21st Sri Lankan Entrepreneur of the Year Awards hosted by the Federation of Chambers of Commerce and Industry of Sri Lanka on 7 December in Ratmalana. Almost 120 SME entrepreneurs across the country were feted at the glittering evening on 7 December, for their achievements in innovation and business with bronze, silver and gold awards. Joining the event were FCCISL President Sarath Kahapalarachchi and FCCISL Secretary General Ajith D. Perera. 

It is estimated that slightly more than one million micro-, small-, medium- and large-scale enterprises are operating in Sri Lanka employing three million people.

“Among the large-scale projects of NEDA are the formulation of the national SME policy and the creation of an SME authority. A national SME action plan is also now being formulated. NEDA is also working on the publication of a SME guidebook and collecting information on Business Development Services (BDS) providers. My ministry is also managing the revolving fund called ‘SMILE 3 Revolving Fund’ to help small-, medium- and micro-scale Enterprises (SMEs) financially. The project is handled through no less than participating commercial banks called Participating Credit Institutions (PCI).  I am pleased to say that a total of Rs. 4 billion ($ 25 m) was distributed to SMEs from January to September this year. 976 projects have benefitted from this. Therefore I can assure our SMEs and industries that our Unity Government will continue to extend its strongest support to our SMEs and their good work.”

This year, Rs. 4 billion was disbursed to 976 projects (from January-September) for several SME aspects but mostly capital investments and working capital by the Ministry of Industry and Commerce’s SMILE III. The number of SME projects benefitted by SMILE III since 2012 is a whopping 2,199 and since 2012 to date, Rs. 5.7 billion has been disbursed. 

The disbursements, which were Rs. 1.7 billion in 2012-2015, saw a massive surge this year (January-September 2016 at a total of Rs. 4 billion) after the SMILE loan cap was increased to Rs. 25 million (from a previous Rs. 5 million) by the ministry to enhance its SME support.