The Asian Development Bank (ADB) this week assured to help Sri Lanka diversify its exports by supporting the Small and Medium Enterprises (SMEs).
ADB Country Director Chen Chen said export diversification strategy will fulfill an increase in foreign exchange earnings and mobilise Foreign Direct Investments (FDI).
“Sri Lanka’s SMEs sector is important, unique and significant to the economy as it provides 42% employment, contributing 20% export value,” Chen said at the National Chamber of Commerce of Sri Lanka (NCCSL).
“ADB is willing to provide assistance to diversify Sri Lanka’s exports through SMEs,” he added.
The Asian Development Bank (ADB) has approved a $165 million loan to Sri Lanka to provide immediate financing support for small and medium-enterprises (SMEs), which have been severely affected by the coronavirus disease (COVID-19) pandemic, and long-term financing to affected SMEs, including businesses led by women and tea smallholders.
The proposed project is a line of credit through 10 participating financial institutions (PFIs) to targeted small and medium-sized enterprises (SMEs) in Sri Lanka, including SMEs that are led by women, are first-time borrowers, do not sufficient collateral and are located outside of Colombo.
The fund allocation for 10 PFIs has been made on a competitive basis. The project also includes an attached technical assistance (TA).
The technical assistance is for (i) developing innovative financial schemes for SMEs and promoting export-oriented cluster development (funded by the Japan Fund for Poverty Reduction (JFPR)) and (ii) developing an ecosystem for women entrepreneurship in Sri Lanka (funded by the Women Entrepreneurs Finance Initiative (We-Fi)).
Chen said ADB is supporting skill development training, employment training and gender equality programmes to modernise the export sector to further achieve value addition.
‘With the Sri Lankan aging population, labour shortages are inevitable in the future. Therefore, ADB’s multi-donor facility extends to develop women in entrepreneurship roles and provide access to finance for start-ups and ongoing SMEs,’’ added Chen, who was the Chief Guest at the NCCSL AGM where Nandika Buddhipala was re-elected as President.
Noting that communication cost is a very high-cost component in international trade, ADB Country Director said introducing digital platforms to SMEs will encourage access to global markets at a lesser cost.
The Guest of Honour Ambassador to Turkey R. Demet Şekercioğlu said: “Turkey regards Sri Lanka as a friendly country in the sphere of economic, social, political, trade, cultural and bilateral relationships. Both countries can play a vital role in developing international trade.”
She said Turkey is one of the key buyers of Ceylon tea, garments, rubber and metals. Turkey mainly exports cereals and pulses to Sri Lanka.
She further pointed out that ‘’both countries have the potential to increase bilateral trade.”
“Turkey trades a substantial volume of merchandise with Europe and African countries due to the geographical proximity between these countries. Turkey will make every endeavour to assist Sri Lanka to access these markets. It will focus on new opportunities to forge ahead with close collaboration between two countries’’.