The Sri Lankan government will introduce loans with a 7% concessionary interest rate to small- and medium-scale entrepreneurs who are struggling with their businesses due to the crises in the past few years, state media reported quoting Secretary to the Ministry of Industries Shantha Weerasinghe.

Weerasinghe said that any small- and medium-scale businesses that have collapsed or are struggling are encouraged to obtain a loan to restore their business, Xinhua news agency reported.

He said businessmen who have been blacklisted for previous non-payment of loans also have access to this loan scheme.

He added that loans up to 5 million rupees (about USD 16,500) can be obtained under the scheme and settled in five years with a grace period of six months.

Small and medium-sized enterprises (SMEs) play a pivotal role in maintaining the economic fabric of Sri Lanka, contributing significantly to employment, GDP and social stability. These businesses, characterized by their limited scale in terms of employees, revenue and assets, are the backbone of the Sri Lankan economy.

The Sri Lankan SME landscape is diverse, encompassing a range of sectors such as agriculture, manufacturing, services and information technology. These enterprises are crucial to the country's economic diversity, resilience and the promotion of innovation and regional development.

The SMEs in Sri Lanka represent over 75% of all businesses, account for 45% of employment and contribute 52% to the GDP.  In 2013/14, SMEs constituted 98.5% of all industrial enterprises, with their employment figures representing 45.7% of the sector's total workforce. Nevertheless, following trends in several other developing countries, the SME sector in Sri Lanka predominantly operates informally.

SMEs in Sri Lanka are at a crossroads, facing unprecedented challenges and new opportunities. The path forward requires a concerted effort from the government and the SMEs themselves. Strengthening the ecosystem for SMEs through supportive policies, access to finance and capacity-building initiatives is crucial. Equally important is the need for SMEs to embrace innovation, sustainability and digitalisation as key drivers of competitiveness and growth.

Article Source - IANS