“For too long Sri Lanka has relied on a State led model of economic growth. This has resulted in a plethora of State owned enterprises, many of which are a burden on the treasury, and use up valuable economic resources. It has also contributed to attitudes of citizens expecting the State to provide everything from jobs to all manner of subsidies. Our government intends to reverse this economic model and change this mindset. In fact, it is not a new mindset, but a reawakening of Sri Lanka’s ancient tradition of trade and enterprise.”
The Minister said that entrepreneurs play a key role in any economy and the growth of economy should be driven by private enterprise. The role of the State is to facilitate such entrepreneurs and provide them the required support to grow their business. This model of economic growth is far more sustainable than one led by debt fueled State led growth.
“In order to develop a growth model driven by private enterprise, the government needs to establish robust institutions, simplified procedures and affordable access to the factors of production, land, labour, and capital,” he said.
Samaraweera said access to factors of production can be challenging for SMEs. The 2018 budget has proposed a number of measures to liberalise factor markets including land and labour. These are being implemented with regular monitoring by the ministry.
“We hope to address this through 15 tailor-made concessional loan schemes under the umbrella of Enterprise Sri Lanka. The lack of collateral is another issue faced by young entrepreneurs and small business. Through the Enterprise Sri Lanka loan schemes we are encouraging banks to lend based on the quality of the business plan and expected cash flows.”
The Minister said in addition the government will soon be introducing the SME guarantee fund which will be another avenue for SMEs to borrow without physical collateral. The next step for Sri Lankan entrepreneurs and the start-up economy is to graduate to the capital markets. The SME Board of the Colombo Stock Exchange can play a crucial role in enabling such young companies to take their first steps ino capital markets and raise equity funding to grow to the next level.The launch of the SME Board is a crucial step in the evolution and development of Sri Lanka’s capital markets. It will also play a major role in expanding access to finance in Sri Lanka, he said.
Enterprise Sri Lanka was launched by Colombo Stock Exchange and Securities and Exchange Commission with the objective of enhancing the access to capital for entrepreneurs and SMEs.