SME Banking Road Show attracts capital hungry SMEs

The small and medium entrepreneurs turned up in numbers at the Sri Lanka Exhibition and Convention and Centre to the SME Banking Road Show recently. They came looking for capital - capital to start up a business and capital to expand an ongoing business.

They found not only access to capital, but bankers ready and willing to advise on how best to present an application and a readiness to lend to this sector, which is generally considered a high risk sector. While the presence of the SME service providers and the seminar for SMEs gave insights in to running an SME, those who came looking for low cost capital boldly aired their views on the high cost of capital.

"SMEs play a vital role in the Sri Lankan economy, comprising approximately 94% of total business units, 36% total industrial employment and contributing 20% of the total value addition to the economy " said Programme Advisor, International Finance Corporation - South Asia Enterprise Development Facility A. L. Somaratne, stressing the importance of SME sector.

The objective of this SME Banking Road Show was to make the SMEs aware of the lending banks requirements and the importance of documentation and proper financial record keeping to access capital.

"Over 1800 persons visited this Road Show on the two days and around 60 SMEs attended the seminar on Saturday" said a representative of the event management company which handled the exhibition for International Finance Corporation (IFC) the private sector arm of the World Bank Group and its advisory service, the South Asia Enterprise Development Facility (SEDF) who organised the Road Show.

At the seminar for SMEs, Somaratne addressed special issues and problems confronting SMEs in a presentation in English with simultaneous translation in Sinhala.

While participants at the seminar showed appreciation of the efforts taken to make it easier for SMEs to get funding from banks, there were complaints about the high cost of capital and the interest differential. Ranjith Guruge, formerly employed by a multi national pointed out "Banks are giving loans at preferential rates to multi nationals and this is not fair.

All the conditions are for SMEs, and added to that a higher interest rate is also charged" Shane De Hoedt, Manager in charge of SMEs at Nations Trust Bank who spent two days at the event said, "There was a good turn out for an exhibition of this nature. Around 1000 people would have visited our stall.

We had four counters at which staff spoke to visitors. Some of them were of the micro finance category, but even to them the advisory service was helpful." Another participating banker, Delakshan Hettiarachchi from Commercial Bank said "It was a good experience for us. We met many potential customers and established initial contact with some clients who were moving from SME to corporate client status.