Financing, Biggest Challenge for the SME’s in Sri Lanka!
With the Small and Medium Enterprises (SMEs) playing a vital role in the economy of the country, financing has become the biggest challenge, says Syed Zed Al Qudsy, President of Malaysia’s SME Factors at a media conference held at the Kingsbury in Colombo on Wednesday.
Adding to that Mr. Syed expressed that, “We are mostly looking to partner with the private sector and not with the public sector. SMEs play an important role in the development of the economy. The potential for SMEs in Sri Lanka is very big. With a lot of foreign investments coming into the country, a lot of projects will begin. The next five years are going to be exciting for the SMEs in Sri Lanka where we expect it to grow five times.”
The media conference was held to announce the expansion of SME Factors’ services into Sri Lanka together with EXIM Bank Malaysia who arrived on the invitation of the Deputy Minister of Finance Sri Lanka, Dr. Sarath Amunugama.
Speaking at the event, EXIM Bank Malaysia President Dato Adissadikin Ali said, “Infrastructure in Sri Lanka is picking up with a lot of changes since 2007. There is a need to support the infrastructure of roads, highways and power (renewable energy). We are looking for a US$ 1 billion investment in Sri Lanka. Depending on the competency and capacity, our bank will invest in the required areas.”
SMEs play an integral role in Sri Lanka’s business economy as they amount to 80 per cent of all businesses. The Sri Lankan local business owners engage in various business sectors; which include agricultural (growing spices, fruits, and vegetables) and manufacturing sector (numerous industrial activities amounting to 20 per cent of industrial establishments). Throughout the years, the Sri Lankan government has taken numerous steps towards developing these business sectors and to support the growth of the local SMEs by improving their finance access, technology transfer, skill development, SME networking and advisory services. Through these initiatives, the Sri Lankan SMEs will be able to increase accessibility to various alternatives of financial support and working capital to grow their businesses.
SME Factors will play a crucial role backed by a proven track record in Malaysia. SME Factors intends to work with a local partner in Sri Lanka and develop capacity with the objective of building the SME industry. The company has provided financing facilities to over 8,000 SMEs in Malaysia and has also received strong support from the Malaysian government.