The first ever nation-wide study on Sri Lanka’s SMEs has recommend integrating the three top national SME institutions under one roof into an apex SME Advisory Commission.
The study also recommends Sri Lanka’s first ever SME Industrial Zone, a national SME portal ‘e-platform’, and an SME-only licensing agency on the lines of Bard of Investment, Minister of Industry and Commerce Rishad Bathiudeen said.
The study ‘Legal and Institutional Study for Creating Enabling Environment for SMEs was commissioned by the Ministry of industry and Commerce and conducted by the Ernst & Young (E&Y) at a cost of Rs 3.2 million.
The study focuses on three aspects- the current business environment relating to Small and Medium Enterprises in Sri Lanka, the prevailing Institutional Framework supporting the sector and the Regulatory Framework that relates to the SME. It also focused on the creation of a more conducive environment for SMEs while transforming them to large scale sustainable business enterprises and linking them to export markets.
The pioneering national Survey covered 20 Ministries that serve the business sector with over 90 of their Departments, authorities and councils established under them. The legal review of the study includes laws and regulations applicable to SMEs in no less than 15 aspects.
Addressing the presentation of the second draft report of the study, Minister Bathiudeen thanked the German development agency GIZ office in Sri Lanka for extending financial support for the initiative and stressed that there are more than one million registered SMEs in Sri Lanka providing employment to three million.
“When we take the unregistered SMEs the numbers will be much more. 52% of our GDP is driven by this sector with more than 40 percent of employment. Also More than 70 percent of enterprises are SMEs and in 2013 20% of exports came from SMEs. Given the importance of SMEs in our economy we worked on the National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka and recently concluded first UNESCO-APEID event in Sri Lanka which was a the first in South Asia. All these initiatives -including today’s assessment study -serve the reform vision of Unity government to link our SMEs to global markets.”
Among the key recommendations of the study is the establishment of an apex SME Advisory Commission for the country bringing the three top institutions active in entrepreneurship – National Enterprise Development Authority (NEDA), Industrial Development Board (IBD) and Small Enterprise Development (SED) – under one umbrella that would transform to Sri Lanka SME Authority, the apex SME body for national level coordination of the critical sector in economy-the SMEs.
The study also recommends an SME Industrial Zone, an e-platform to manage SME market supplies, and a one stop licensing agency similar to BoI for all SME licensing needs.
Additional Secretary of the Ministry of Industry and Commerce MA Thajudeen said the National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka- is now on the web at neda.gov.lk. “It is not a document set in stone but is subjected to revision every once in three years. We call for your active participation in developing it further,” he said.
The Study report presented on 22 October was not a final report but is now expected to be further strengthened with inputs and opinions from stakeholders present at October 22 session.
When finalized, the recommendations from the study are expected to shape the long awaited way forward vision for Sri Lanka’s SME and entrepreneur domains that the government is keen to position for export markets.
