Workshop on SME policy development

Sanjeevi JAYASURIYA

The Enterprise Development and Investment Promotion Ministry has initiated action to formulate a comprehensive SME policy with a series of policy instruments to accelerate the development of SMEs based on international best practices to fill the void in nationally accepted definition for SMEs and a policy framework, said Enterprise Development and Investment Promotion Ministry Secretary, B.H.M. Ratnasiri.

The National Enterprise Development Authority (NEDA) conducted a workshop on SME policy development in Sri Lanka in Colombo yesterday.

B.H.M. Ratnasiri. Picture by Sumanachandra Ariyawansa

The SME policy takes into account the special constraints and opportunities faced by entrepreneurs and aims at strengthening institutional framework that will address these constraints and facilitate harnessing the opportunities, he said.

Among the constraints identified are lack of competitive advantages over large enterprises, insufficient information and advice, lack of financial discipline, non availability of formal business plans, marketing constraints and lack of knowledge in advanced technology and inability to retain skilled human resources. There is a growing need to focus on the development of regional economy and giving priority to cluster development as a strategy by moving away from piecemeal approaches to SME development, Ratnasiri said.

The SME sector has great potential to generate socio economic benefits to the country with a low level of investment.

The relatively labour intensive nature of the sector, coupled with regional dispersions of cottage and small scale industrial enterprises, enables them to create substantial employment opportunities particularly in the informal sector, he said.

The SMEs have the capacity and capability to mobilize and divert financial resources in the economy, that would otherwise be used for consumption purposes, and for useful investment purposes in rural areas. The development of SMEs can be an aid to promote balanced regional development, he said.

The promotion of SME sector forms an integral part of poverty alleviation and regional development programs implemented by the Government and non-governmental organizations further supplement these efforts.

The SME sector provides high value addition in view of its greater utilization of indigenous machinery, equipment and raw material.

The sector nurtures entrepreneurial talents and forms a good ground for training employees, Ratnasiri said.

Development of the Small and Medium Enterprise (SME) sector is a high priority in the agenda of the Government policy declaration Mahinda Chinthana and the acceleration of the growth of the SME sector throughout the country especially in the Northern and Eastern provinces will be a reality with the elimination of terrorism, he said.