Govt pledges foreign investment assistance to Lankan SMEs | Daily News

Govt pledges foreign investment assistance to Lankan SMEs

CMA President Prof. Lakshman Watawala presenting an SME development proposal to Prime Minister Mahinda Rajapaksa looked on by other ministers. Picture by Shirajiv Sirimane
CMA President Prof. Lakshman Watawala presenting an SME development proposal to Prime Minister Mahinda Rajapaksa looked on by other ministers. Picture by Shirajiv Sirimane

The government will try to woo foreign investments and provide them to the small and medium (SME) sector to develop, Prime Minister and Minister of Finance Mahinda Rajapaksa told the CMA Sri Lanka COVID - 19 SME Development Committee organized SME Development Conference 2020 held at Magam Ruhunupura International Convention Centre (MRICC) Hambantota yesterday.

The event titled ‘Solutions to meet challenges faced by SMEs in Financial Management, Bank Funding and Entrepreneurial Leadership in the Post COVID - New Economy’ was organized by The Institute of Certified Management Accountants of Sri Lanka the National Professional Management Accounting Body in Sri Lanka and Hambantota District Chamber of Commerce supported by Ministry of Industries. Premier Rajapaksa, who was the Chief Guest said that the SME sector contributes 52% to the GDP and 45% of jobs are created in Sri Lanka through them.

“Due recognition is not given to them and they are lagging in finances for their future endeavors. This is the reason we decided to channel them some foreign funds.”

Ajith Nivard Cabraal, State Minister of Money & Capital Market and State Enterprises said that the SME sector needs a lot of funds but not through loans.

Cabraal said “I am suggesting that the banks should leave aside 5% from their profits and set up a separate fund so that this can be used to fund SME Enterprises on an equity basis. This will provide a winning combination for both the bank and the entrepreneur.”

“We should understand that enterprises have fallen into debt during the last few months not solely due to their faults but due to lockdowns and mismanagement of the economy by the previous government.”

Hence also a fresh approach would be made to the CRIB which will allow them to relax some of the credit regulations allowing entrepreneurs to take credit from banks. State Minister Cabraal said that the Doing Business Index which was at the 89 positions 6 years ago slumped many positions during the previous government and steps should be taken to elevate this to a better position.

He also appealed to entrepreneurs to think out of the box according to the ‘new normal’. Minister of Industries Wimal Weerawansa said that a new mindset should come from the central bank to meet the challenges of the new normal. He also said that though people are suffering and dying globally from the COVID pandemic, it has given a new opportunity for the local industries to rise and meet the demands of the new normal.

The central bank along with other institutions should support their financial needs. Around 300 to 400 participants were able to attend the conference who mostly from the area.