President Maithripala Sirisena yesterday called on State banks to focus on providing affordable financing to entrepreneurs, pointing out that generating colossal profits alone was insufficient to promote the welfare of the country.
The President addressing the ‘Enterprise Sri Lanka’ program launch at the BMICH on Friday acknowledged that Small and Medium Enterprises were the backbone of the economy and critical for job creation and for tangible economic benefits to filter to the masses.
He pointed out that State banks generally performed well, generating significant profit, but stressed that as public banks they had a responsibility that went beyond mere profit creation to improving the economy of Sri Lanka as well.
“We have to ask ourselves whether banks exist to generate profit or whether they are able to exert themselves and provide services to the people. In my view State banks have multiple roles to play, perhaps 50% of their effort should be focused on profit generation and 50% in providing services to the people,” he said.
While acknowledging that profits were important to fund the economy and by extension the Government, he highlighted the need for capital flows to be equitable so that different segments of society would be able to benefit from the country’s financial system.
“An entrepreneur is someone who takes his talent, his creativity, his intelligence, his resourcefulness, and brings it all together to stand on his own two feet. An entrepreneur is someone who perseveres, who fights the odds, who never gives up and who helps others along the way. These are laudable qualities to have and I firmly believe that Sri Lankans have these abilities in abundance. This is an effort on behalf of the Government to find a way to support such people.”
He praised the Government, and in particularly Finance Minister Mangala Samaraweera, for formulating the program that aims to create 100,000 new entrepreneurs by 2020.
However he pointed out that it was imperative to create awareness and improve financial literacy of people so that they do not unwittingly become indebted to banks and find it more difficult to live.
The program has 15 tailor-made local- and donor-funded financial and non-financial schemes under the umbrella. The credit program aims to provide access to finance at an affordable rate with the Government guaranteeing some of the loans and providing concessionary interest rates.
The most challenging issue that is faced by Small and Medium Enterprises is access to finance and absorbing high interest rates, officials acknowledged at the event.
President Sirisena noted that it was imperative for State organisations, including ministries and departments, to support the Government’s latest efforts to promote entrepreneurship on a large scale by improving market place access and enabling small businesses to be more competitive.
“I travel around the country and hear the complaints of the entrepreneurs. Whether they are growing pomegranates in Kaplitiya or bananas in Hambantota, they complain that they cannot get market access for their harvests. This is a problem that we need to solve. This program can be the salvation of Sri Lanka or it can be a massive waste of resources. I believe that while we promote entrepreneurship it is also important to address these issues. Businesses need access to markets and they need a local footprint before they can export. We see this in all developed countries around the world and we must create a conducive environment for local businesses in Sri Lanka.”
However, he acknowledged that Sri Lanka could not grow in isolation as technology, expertise and knowledge would have to come from elsewhere. He recalled that in the past many more products were manufactured in Sri Lanka but now even kites and Vesak lanterns were imported, reducing the creativity and enterprising nature of locals. He advocated for renewed investment to tap into new ideas and use technology in different ways to solve problems and raise the standard of living for all Sri Lankans.
From Sri Lanka to the world
Govt. support to bring new generation of local entrepreneurs to realise their potential
Wickremesinghe addressing the ‘Enterprise Sri Lanka’ launch recalled that when the Government came into power it was challenged with many issues including high levels of external debt. However, in the space of three years the Government had managed to address these issues and foster macroeconomic stability.
“All we had done was take loans. Now we can give loans. During the last year Sri Lanka recorded the highest level of Foreign Direct Investment (FDI) and highest level of exports. These are positive developments that we aim to continue. Entrepreneurship and the establishment of new businesses in integral to this development and we are confident that this program, launched here today, will go a long way to broad-basing growth,” he told the gathering.
The Prime Minister also backed economic liberalisation, recalling that before opening the economy there were limited companies and businesses in Sri Lanka that were owned by ordinary people. Most were either owned by the Government or large corporations.
“In those days Kiribathgoda had only one line of shops. Nugegoda and Maharagama were the same. They became urban centres after the opening up of the economy when competitiveness allowed new businesses to flourish and an expanding economy provided people with jobs and the ability to earn well. These strong consumers were the reason that we have entrepreneurs today and this is an effort that we must continue to expand,” he said.
‘Enterprise Sri Lanka’ would give local youth the support and encouragement needed rethink and redefine the future, Wickremesinghe said. “Forty years ago no one saw the impact of computers, or the smartphone or the internet. But these are all things that new entrepreneurs have access to and can benefit from and use to take new products and services from Sri Lanka to the world.”
Entrepreneurs are new growth engine: Mangala
Holistic effort to provide support to multiple sectors to create jobs
Finance Minister Mangala Samaraweera yesterday termed entrepreneurs the new engine of growth and called forth a fresh economic impetus from their creativity to drive forward growth that would foster 100,000 new entrepreneurs by 2020.
Speaking at the launch of the ‘Enterprise Sri Lanka’ program in Colombo on Friday, Samaraweera emphasised on the need for Sri Lanka to develop a comprehensive entrepreneurship structure that encourages people, especially graduates, to embark on building their own businesses.
He pointed out that many other countries had developed programs specifically targeted at grooming entrepreneurs, which had boosted growth and created job opportunities for rural communities.
“In Sri Lanka, we still have as few as 25,000 youth gaining public university admission every year. Even though many others resort to private universities and vocational training, there is still a gap regarding entrepreneurship. We have to change this trend and enable young people to use their creativity and new technology to find new growth paths for the economy,” the Finance Minister said.
Samaraweera called on banks to support entrepreneurs by engaging more holistically with them, including formulating businesses plans and conducting feasibility assessments as many entrepreneurs may lack the ability to come with comprehensive plans to banks.
He also advocated that banks should proactively seek out entrepreneurs and attempt to provide solutions to their capital requirements. The role of banks would need to evolve from taking deposits and giving out consumption-related loans to supporting entrepreneurs.
He also stressed the need to establish entrepreneur windows in State banks such as People’s Bank and Bank of Ceylon, as well as regional development banks to cater to entrepreneurs. These banks would also have relationship managers to exclusively deal with entrepreneurs seeking loans under Enterprise Sri Lanka. The Finance Minister also expressed hope that private sector banks would also join their State counterparts in this endeavour.
“As many as 100 loan schemes currently offered by banks would be restructured under this ‘Enterprise Sri Lanka’ program. It is estimated that about 150,000 youth are unemployed in Sri Lanka. These people are prey to extremist organisations, drugs and the underworld because they feel that they are not capable to lead productive lives. We must show them that that is not the case, and that we are ready to assist them in becoming worthwhile citizens,” the Minister added.
Samaraweera also outlined special provisions for female entrepreneurs, pointing out that they would be given special consideration. If 10 people or more begin a business and half of them are women, then they will be given an additional 10% relief in interest rates. Differently-abled people will also be given similar concessions with interest rate relief.
“When we talk of entrepreneurship for women, they are often just given sewing machines. But, women have the same capacity as men to start, manage and expand a business. Yet there are shortages in opportunities open to them, and we must change that and empower women to take their rightful place in our economy,” he stated.