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MSMEs hit by the economic crisis join hands to form new lobby group

By: Staff Writer

April 23, Colombo (LNW): Despite the government’s rescue efforts with ADB assistance the economically critical yet troubled Micro, Small and Medium Enterprises (MSMEs) have united to launch a new lobby group to evolve effective solutions to their plight thereby ensuring stability and prosperity in the country.

The government said a significant number of small and medium-scale entrepreneurs involved in manufacturing, import, export, tourism, apparel and various other commercial operations have found it very difficult to continue running their enterprises as a result of the economic downturn and the impact of external factors beyond their control.

The Asian Development Bank has agreed to provide working capital support for the small and medium enterprise sector as a relief, the Government Info. Department said.

Rs. 20 billion will be spent on the entire project which has two components. Out of this, Rs. 15 billion rupees will be used to strengthen existing and new enterprises and the remaining amount of Rs. 05 billion will be used to support enterprises under the non-performing loan category.

Named the “Ceylon Federation of MSMEs” the promoters said it represents 1.1 million formal MSMEs in the country and the grouping is apolitical.

The launch coincided with the fifth anniversary of the 2019 Easter Sunday attacks which was the beginning of multiple crises including the COVID-19 pandemic, and political and economic chaos in 2022.

Special guest Prof. Harald Steger, an ex-banker from Switzerland, said being an entrepreneur is very challenging and hence needs support with an enabling environment.

He stressed the need for a development bank dedicated entirely to MSMEs as they are key to socio-economic stability and prosperity.

Ceylon Federation of MSME President Sashika De Silva said the new grouping will be the platform to unite all entrepreneurs in the country and champion the growth of MSMEs.

“The Federation will be the platform designed with a clear vision, strategic approach, and innovative solutions to propel Sri Lanka’s entrepreneurs to new heights,” she said at the launch ceremony held at the BMICH attended by MSMEs from multiple districts, Members of Parliament, politicians, and state sector officials.

She said central to the Federation’s vision is the imperative need for Sri Lanka to transition towards a manufacturing economy, a transformation that cannot be realised within the current framework of laws and regulations primarily favouring imports and trade.

“Recognising the limitations in the Government’s capacity to single-handedly create the necessary environment for this transformation, we have identified key gaps, strategic imperatives, and actionable solutions.

Vice President Mahendra Perera revealed that multiple crises in the country have led to Rs. 1.6 trillion worth of loans in default accounting for 13% of total bank lending.

“The Federation will champion the need to restructure existing debt and obtain working capital,” he added.

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