Bank of Ceylon SME sector committed to nurturing Sri Lanka’s economic prosperity

A strong and diverse Small and Medium Enterprise (SME) sector is today acknowledged as being a critical factor in achieving sustainable economic growth. From humble beginnings, the SME sector has grown to account for over 80% of registered businesses in Sri Lanka, contributing to over 50% of the country’s GDP and providing employment and empowerment to over 35% of the country’s population.

The sector’s exponential growth and stability has been achieved through its recognition as a viable economic driver. The Bank of Ceylon was a pioneer in developing a portfolio of products and services offering significant financial support since early stages, enabling the SME sector to reach the position of strength it enjoys today, and continues to be a primary entity in the support and growth of this sector. 

Following are excerpts of an interview with Bank of Ceylon Deputy General Manager of Retail Banking Chandrani Jayarathne:

Q: How has the Bank of Ceylon contributed to the growth of Sri Lanka’s SME sector?

A: The Bank of Ceylon was among the first financial institutions to recognise the strategic value of the SME sector and to play an active role in encouraging and assisting in its growth. 

Our financial service models for the SME sector have proven to be a great success and an integral factor in its growth and stability today. We offer a range of lending lines to the SME sector, which today form a sizeable portion of our lending portfolio. In crafting our products and services for this sector, we have taken into account the particular requirements of this sector, such as financial accessibility, training and support, payment flexibility, etc. which has encouraged SME customers to reach for their dreams. 

We are today recognised as an entity that will go the extra mile to serve our customers and ensure their financial success. 

Q: How does BOC assist in the sector’s sustainability?

A: We have made it our mission to provide SME loans to a wide variety of industries to ensure equitable economic development. We provide loans to virtually every sector, including agriculture, fishing, garments, animal husbandry, plantations, dairy, factory upgrades, tourism related industries, infrastructure development and education. 

We also encourage entrepreneurship in industries which are not traditionally considered mainstream such as beauty culture, bakeries, furniture manufacture, handicrafts, etc. 

We also offer special interest rates and other concessions in a bid to encourage economic development in a wide variety of spheres. 

Q: Potential SME entrepreneurs often find it difficult to obtain funding as they often do not meet the traditional criteria for loans. How has the bank assisted this sector?

A: We have gone to great lengths to ensure the financial accessibility of our products.  We understand that a section of our clients are not in a position to furnish collateral, reams of paperwork, which are generally required. Our model focuses on assessing financial viability of the proposal, its potential contribution to GDP and employment, etc. 

Thereafter the bank’s officers work together with the entrepreneur to craft a suitable flexible financial plan, and the officer works with the customer to help them achieve its requirements. 

Q: What are some of the new initiatives the bank has introduced to expand and fortify this sector?

A: Two areas the bank champions is the economic empowerment of women and youth entrepreneurship – also identified as viable engines of growth by the Government of Sri Lanka. Women are often overlooked in the workforce, despite making a significant economic contribution. BOC has taken steps to encourage women to achieve economic independence and self-sufficiency by offering concessionary rates, providing them with the necessary training and skills to set up their own enterprises, etc. enabling women to achieve independence, self-sufficiency and independence.  

Another area we are actively supporting is youth entrepreneurship. The country’s youth have great potential and with the right guidance and direction can achieve singular heights. We encourage youth entrepreneurs to become entrepreneurs and supporting them through guidance, exposure and specially crafted financial services packages.

Q: Could you expand on the Bank of Ceylon’s training program for the SME sector?

A: BOC conducts several entrepreneurial skills development programs countrywide. These are aimed at ensuring that aspiring entrepreneurs are provided with the necessary skill set to make their projects a success. The Entrepreneur Capacity Building Programs offer invaluable advice to our SME customers on areas such as Labour laws, tax regulations, environmental concerns, financial analysis, working capital and cash flow management and effective customer service. 

Recognising that capital alone does not determine the success of entrepreneurial projects, BOC has gone to great lengths to ensure that the initial momentum entrepreneurs gain with access to capital, is maintained throughout their projects with support skills and knowledge, enabling and empowering them with the necessary sustainability and independence that will ensure the long term viability of their endeavours. 

Q: How has the success and growth of the SME sector portfolio been reflected in BOC’s growth? 

A: The bank has, over the years, focused on strengthening the SME portfolio as well as the SME customer and loan base. This strategy has proved successful and within a short period of time the SME loan base has shown rapid growth, increasing 11% from 2010 to 2015 to reflect an increase from Rs. 2,697 million to Rs. 14, 305 million. The SME operations form a significant portion of the bank’s overall loan operations. 

Q: How has the bank’s mission to protect the environment been translated to the SME sector?

A: As a responsible corporate citizen, BOC is committed to ensuring environmental protection and sustainability through its endeavours. The bank encourages SMEs that focus on ensuring environmental sustainability, and we also evaluate SME proposals for environmental impact. In addition, all projects funded by the bank have to meet government environmental regulations and are required to obtain relevant licenses.

Q: Are there any success stories that personify the impact that the bank’s SME sector efforts have on its customers?

A: Countless numbers of our clients go on to achieve financial empowerment and independence, with many of them reaching greater heights than they would ever have thought possible. 

The success story of Ominta Aquarium International is one such highlight. Bank of Ceylon, through its SME services sector, assisted the company’s owner Nimal Jayasuriya to set up his business. As the business expanded, the bank provided the support and advice he needed to grow it from a small scale enterprise to a large export concern. Today Ominta Aquarium exports 600-800 crates of ornamental fish a month to destinations around the world including the USA, Europe Australia and the Middle East, and provides employment to nearly 5,000 families.  

Similarly, Nimal Jayasuriya is another beneficiary of the bank’s services in this sector. Having obtained a loan from the Bank, with the advice and support of the bank’s relationship officers, he grew his fledgling instant food enterprise to a concern that today exports 14 varieties of canned and vacuum packed food items across the globe. Jayasuriya has won multiple prestigious entrepreneurship awards and attributes his success to the support and guidance he has continued to receive from the bank. 

Stories of this nature abound in this sector. H.D.P. Weerasinghe is yet another happy customer. Weerasinghe embarked on his entrepreneurial journey with the assistance of BOC’s SME loan. Today he is the proud owner of a hydroelectricity power generation plant producing 1.5 Megawatts of power. Through this project he has not only secured his financial future but also provides an invaluable service through contributing towards the power generation requirements of the country.

Justin Perera’s story of success in the garment industry is a similar one. Starting out with a modest number of sewing machines with the assistance of BOC’s SME financial plans and the invaluable advice of its loan relationship officers, Perera was able to create a strategic and sustainable growth plan which today has him owning an embroidery solutions company which exports products to international luxury lingerie brand Victoria’s Secret.