Sri Lanka needs more development banks to spur the growth of local businesses, particularly the SME sector development activities.
SMEs are considered as the backbone of the economy and it accounts for 65 % of local businesses. And also, SMEs play a significant role in income distribution and regional development.
“However, we don’t have many development banks in the country, and the two development banks in Sri Lanka have also been privatized. Many banks don’t have money to spend for their research and development activities,” If we don’t lend these small scale entrepreneurs a helping hand, they will vanish in thin air. Unfortunately, they are disorganized and don’t follow proper book of accounts.” Sri Lanka Institute of Directors, Chairman Preethi Jayawardena told at a seminar held in Colombo last week.
He pointed out that lack of finance has become an obstacle to SME growth in Sri Lanka adding that “banks are atrocious in lending money to SMEs as small and medium scale entrepreneurs often fail to pay back money as per the initial agreement of the loan. “Therefore, there can be no development in any country without equal opportunities.” he said.
He said further the country is boasting of 4,000 per capita GDP, “in reality that is only coming from 15-20% of the population and in this country, rich is always getting richer and poor is getting poorer,”Jayawardena said.
In addition, Jayawardena added that SLID had conducted a lengthy discussion with the Securities and Exchange Commission of Sri Lanka to find ways to accelerate gender diversity or bring more women on boards.
“We are trying to get through a quota system to bring more women on boards and hoping to bring it as a policy document to the budget.” Jayawardena noted.
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