By: Staff Writer
January 25, Colombo (LNW): When the government announced fresh relief measures for disaster-affected businesses, the message was clear: livelihoods would be restored, economic activity revived, and affected communities helped back to normalcy. Yet for thousands of micro, small and medium enterprises (MSMEs), particularly those hit by recent cyclones and floods, the promised relief remains frustratingly out of reach.
The new circular, issued as an extension of Budget Circular No. 08/2025, outlines a structured grant scheme ranging from Rs. 25,000 to Rs. 200,000 depending on business registration status. On paper, the framework appears inclusive, covering registered businesses, unregistered domestic commercial units, manufacturers, greenhouses, and even temporary trading operations. In reality, navigating this framework has proven to be a daunting task for small entrepreneurs already struggling to recover.
One of the biggest hurdles lies in bureaucratic procedures. MSME owners report being sent back and forth between Divisional Secretariats, Industry Ministry offices, and local authorities to verify registration status, disaster impact assessments, and eligibility categories. Minor documentation gaps often caused by disaster-related losses have led to delays or outright rejection of applications.
Banking regulations further complicate matters. While grants are intended to help businesses “become fit for resumption,” many MSMEs are also required to regularize existing loans or open specific bank accounts before receiving funds. Entrepreneurs with prior loan defaults often the result of disaster-related income loss find themselves excluded from additional credit or even grant-linked facilities. For micro-entrepreneurs operating on daily cash flows, these requirements are unrealistic.
Cyclone-affected traders operating from temporary structures or mobile units face additional barriers. Although the circular allocates Rs. 25,000 for such units, officials often demand proof of permanence or prior registration, contradicting the very definition of temporary businesses. As a result, some of the most vulnerable traders are left without support.
The “one grant per unit” rule has also generated confusion. Businesses registered with both the Industry Ministry and Divisional Secretariat are entitled to only a single allowance, but inconsistent interpretations by local officials have led to processing delays and disputes.
Despite the government’s stated commitment to coordinated recovery and funding through the Defence Ministry, the absence of streamlined procedures has weakened the program’s impact. For MSMEs battling damaged assets, disrupted supply chains, and mounting debt, relief delayed is relief denied. Without urgent simplification of processes and flexibility in banking rules, the government’s well-intentioned measures risk remaining mere policy statements rather than meaningful lifelines.
