Sri Lanka’s Budget 2019 has fetched a much needed windfall to Sri Lanka’s entrepreneurs and small businesses. More importantly, the latest Budget skilfully prods the sector towards exports.
“Many financial and credit facilities as well as non-financial support have been offered to our MSMEs in the Budget 2019. Our MSMEs exceeding one million, stand to benefit from these proposals. The National Enterprise Development Authority (NEDA) can strengthen its MSME and entrepreneurship programs with some of the proposed initiatives including ‘Nangwamu Lanka’ Micro and Small Enterprise Development Program. Most importantly, some SME proposals encourage them towards the export sector, which helps to link them to international markets. We commend Finance Minister Mangala Samaraweera for such support to SMEs,” said the Minister of Industry Commerce, Resettlement of Protracted Displaced Persons & Cooperative Development, Rishad Bathiudeen on the eve of March 5.
Minister Bathiudeen was in discussion with some of his officials in Colombo on the proposals presented by Budget 2019.
Accordingly, the Budget 2019 extends support to ‘Nangwamu Lanka’ Micro and Small Enterprise Development Program, which plans to develop small, medium industrial entrepreneurs through Industrial Development Board (IDB) under Minister Bathiudeen.
A proposal to establish a Fund under the Central Bank of Sri Lanka (CBSL) to provide guarantees to the SME Sector can reduce SME’s collateral burden. Under proposed ‘Jaya Isura’, ‘Small’ Enterprises with an annual turnover, between Rs. 10 million to Rs. 250 million, employing 5 to 50 in agriculture, fisheries, ornamental, fisheries, livestock, floriculture, horticulture, light engineering, printing, tourism, handicrafts, wood based products, apparel, information, technology, manufacturing and renewable energy sectors get maximum loan amount of Rs. 50 million and if they export, Rs. 100 million.
‘Medium’ enterprises with an annual turnover, between Rs. 250 Mn- Rs. 750 Mn, employing 51 -300, in above sectors, get a maximum loan amount of Rs. 200 million -and if they export, Rs. 400 million. A National Credit Guarantee Institution for SME Entrepreneurs for forming companies is proposed. This scheme will be supported by ADB.
Loans for SMEs will be at a low rate of 1-2%. The government will subsidize 75% of the monthly instalment, including the loan instalment and interest for SMEs. There are non-financial support too-the technical support extended by Budget 2019 to Lankan SMEs to incorporate companies, maintain books and records, negotiations with financial institutions, and access to market are among noteworthy proposals.