SME sector forms the Backbone of the Economy states PM at inauguration “CMA Sri Lanka Covid - 19 SME Development Conference”
The inaugural CMA Sri Lanka COVID – 19 SME Development Conference 2020 - “Solutions to meet challenges faced by SMEs in Financial Management, Bank Funding and Entrepreneurial Leadership in the Post COVID - New Economy” organised by the “CMA Sri Lanka COVID - 19 SME Development Committee” was held on Sunday 20th September at the Magam Ruhunupura International Convention Centre (MRICC), Hambantota under the distinguished patronage of Hon Mahinda Rajapakse Prime Minister who was the Chief Guest and Hon Chamal Rajapaksa Minister of Irrigation, Hon Mahinda Amaraweera Minister of Environment, Hon Wimal Weerawansa Minister of Industries, , Hon Ajith Nivard Cabraal State Minister of Money & Capital Market and State Enterprise Reforms, Hon. D.V. Chanaka State Minster of Aviation and Export Zones Development, together with other distinguished invitees.
The “CMA Sri Lanka COVID - 19 SME Development Committee” comprises Professional Bodies, Chambers of Commerce & Industry, Commercial Banks and Industry Experts who have been meeting since April 2020 with the lock down to find solutions to problems faced by the SME sector.
This event was co-hosted by the Hambantota District Chamber of Commerce and sponsored by nine Commercial Banks in the Hambantota District and supported by the Ministry of Industries and other Chambers of Commerce of Industry. The corporate sponsors were the Hambantota International Port Group and Sri Lanka Telecom.
The Prime Minister in his speech stated that the SME sector forms the backbone of the economy and is found in all sectors of the economy and accounts for 52 percent of the GDP, and 45 percent of the total employment, whilst making up more than 75 percent of the total number of enterprises in the country.
The Prime Minister thanked the President of CMA Sri Lanka and the Co-ordinator of the CMA Sri Lanka Covid - 19 SME Development Committee Prof. Lakshman R. Watawala for inviting hin to inaugurate the First Regional SME Development Conference at the Magam Ruhunupura International Convention Centre. He also stated that he was happy to address the SME business community of the Hambantota District at this prestigious venue which fortunately was not used to store paddy by the previous government and is in good shape to be used for important conferences.
I appreciate very much your great effort in bringing together nine (9) banks in the Hambantota District with over 300 SME customers to this very important Conference on the theme - “Solutions to meet challenges faced by SMEs in Financial Management, Bank Funding and Entrepreneurial Leadership in the Post COVID - New Economy”.
The Finance Ministry under me has supported the
COVID – 19 affected businesses to the tune of Rs 130 B granted through the Banking Sector with the support of the Central Bank of Sri Lanka. Whilst providing concessionary interest rates for loans, working capital requirements, credit guarantees are some of the measures taken to assist SMEs in reviving their businesses in these difficult times.
I have noted that this conference will cover important areas of proper financial management, proper utilisation of funds for the development of businesses, training and skill development, marketing both local and exports and labour matters.
We will provide all facilities for the development of the exports by SMEs as I find the share is only 5% compared to the global average of 30%. I must congratulate the CMA COVID 19 SME Committee for coming up with the idea of setting up of Export Houses to promote SME exports and we will provide all support by granting incentives and other assistance to those who venture to earn valuable foreign exchange for Sri Lanka.
Also the recommendations of the committee to grant tax incentives for the SME sector will be supported as this will enable many of these businesses affected by COVID 19 Pandemic to withstand the difficult times and make them stronger and viable especially those who are operating in difficult and most difficult areas such as the SMEs in the Hambantota district.
I am also indeed happy to state that the committee recommendation to set up a Credit Guarantee Institution which has already been submitted to the Cabinet by the Minister of Industries to provide collateral to those SMEs and start - ups that are unable to provide security due to lack of assets will be fully supported by my ministry with the assistance of the foreign lending agencies who have already pledged to provide the necessary funding.
It is also a great achievement to see so many SME businessmen who are supported by the banks in the Hambantota district under one roof today due to the excellent work done by the CMA Sri Lanka COVID – 19 Pandemic Committee. I wish to congratulate the banking sector for their support to develop the SME sector in the Hambantota district. I am confident that with today’s inauguration they will be able to organize similar SME conferences in other districts which will not only benefit the SMEs and the Sri Lankan economy but the banking sector who will be able to witness their investors flourishing and be able to give more and bigger loans and also benefit by their loans been repaid on a timely basis reducing loan losses benefitting all parties bringing prosperity to Sri Lanka.
I wish the CMA Sri Lanka Covid - 19 SME Development Conference all the best and assure the Committee of my full support in their effort to build and strengthen not only the domestic SME sector but also SME exports which will earn valuable foreign exchange a great need in the development of the economy of your motherland.
Prof Lakshman R Watawala President CMA Sri
Lanka and coordinator of the “CMA Sri Lanka COVID - 19 SME Development Committee” presented the following Committee proposals to the Hon Prime Minister.
1. Establishment of the Small and Medium-sized Enterprises (SMEs) Credit Guarantee Institution, a new nonbank financial institution that would help SMEs to access commercial loans by providing credit guarantees a substitute for collateral.
2. Recommendations for labour law revisions due to problems faced by SMEs due to COVID 19 Pandemic most of the labour laws have been violated due to non-payment of salaries and wages and statutory dues and hence to work certain out reliefs in the best interests of both parties. To introduce a private pension scheme which will encourage people to stay with the private sector rather than move to the government sector due to the pension benefit. Also like in India to permit employees to withdraw a limited amount from their EPF balances to meet the difficulties encountered due to COVID – 19 Pandemic.
Proposals for Tax incentives and small business relief including the uniform definition of MSMEs for both classification and tax purposes with the medium enterprises going up to a turnover of Rs 750 M. Also details of the incentives and reliefs suggested to assist the SMEs in obtaining working capital, investment of capital, finding markets to sell products and services, development of financial and management skills, upskilling the workforce, direct and indirect exporter benefits, technology adoption, social security scheme, 3. human capital development, assisting differently abled people and value addition. Also to give higher incentives to those starting SMEs in Difficult and Most Difficult areas to promote investments and economic activity in rural undeveloped areas. Export Marketing support to SMEs by establishing Export Houses. The Export Houses will assist the SMEs to export their products by providing storage facilities, cold rooms, bulk transport, in making products or services export ready and finding the international markets. Identifying leading Sri Lankan companies to explore opportunities to attract Japanese investments affected by COVID – 19 Pandemic to shift to Sri Lanka.
Hon. Wimal Weerawansa Minister of Industries, spoke on the SME industrial transformation in the New Economy. He also stated that the commercial banks and the Central Banks should support the SME sector affected by the COVID – 19 pandemic on a timely basis as otherwise they will find it difficult to overcome the difficulties experienced. Also the importance of technology for industrial growth and development.
Hon Ajith Nivard Cabraal State Minister of Money, Capital Markets and State Enterprise Reforms, spoke on the COVID - 19 Pandemic - Rapid Recovery of SME Business and the need for a specialised bank to be set up to provide equity capital to the SME sector with the support of the commercial banks.
The Welcome speech was made by Prof Lakshman R Watawala President CMA Sri Lanka and Coordinator CMA Sri Lanka COVID 19 SME Development Conference 2020 covering the “CMA Sri Lanka COVID 19 SME Development Committee contribution for Economic Development”.
He stated that the recent Covid-19 Pandemic and the lock down has greatly impacted the SME Sector and the committee is engaged to provide urgent assistance for their revival in many areas by the setting up of “SME Help Desks” by the member Chambers of Commerce and Industry with Expert committees to advice on Financial, Labour, Management, Marketing, Entrepreneurship, Skills Development and accessing Commercial Bank Loans and other facilities.
The Conference attracted SME customers of the commercial banks operating in the Hambantota District, and around 375 SME’s and invitees attended the conference.
Dr Kulatunga Rajapakse Emeritus Managing Director DSI Group of Companies gave an address on the Role of SMEs in the development of Sri Lankan Economy in the New Normal. He spoke on the need for flexibility in the application of labour laws due problems faced by the SME sector and that it is necessary to provide relief to the SME sector. 4. 5.
The vote of thanks at the inaugural session was delivered by Mr Suresh De Mel – Director Hambantota District Chamber of Commerce the co- hosts for the SME conference.
The technical sessions of the conference covered topics on Post COVID – 19 Financial Management in SMEs delivered by Dr Chamara Bandara Founder/ MD Corporate Doctors ( Pvt) Ltd. on the benefits of having proper financial records, not to be afraid of taxes as many of the SMEs are not liable to taxes, importance of cash flow management and not to mix the business money with personal money.
The lecture on obtaining concessionary Bank loan facilities, moratorium and credit guarantees provided by the Central Bank of Sri Lanka Bank was delivered by Mr Dilshan Fernando Manager SME Commercial Bank of Ceylon. He also stressed the importance to work closely with the banks to win their confidence as well as to get their support when doing well as when in difficulty.
The first panel discussion was on the Role of Banks in providing finance for SMEs with the participation of the 9 banks. The banks were represented by, Bank of Ceylon – Mr M R N Rohana Kumara Actg. DGM ( Recovery Corporate), Peoples Bank - Ms. V. Krishani Narangoda Deputy General Manager – Enterprise Banking, Hatton National Bank – Mr Kalaivasan Indravasan Chief Manager Head of SME & Micro Finance, Commercial Bank – Mr Dilshan Fernando Manager SME, Sampath Bank - Mr. Chaminda Abhayawardena Senior Regional Manager - Galle , Seylan Bank - Mr. Thushara Sirinayake Area Manager – South, DFCC Bank– Mr Pradeep De Alwis Vice President / Regional Manager, National Development Bank - Mr. Thilina Hewage
Regional Manager Southern Province, and Sanasa Development Bank – Mr Thilak Piyadigama, CEO.
The session was Moderated by Mr Chaaminda Kumarasiri – Chairman HCP Consulting, Management Consultant.
They spoke on the details of bank services provided to their customers in the Hambantota district and that they were always prepared to serve their customers especially in this difficult period.
The second panel discussion was on Management and Entrepreneurship development in the new normal with experts in the labour, taxation, export, entrepreneurship with the two corporate sponsors SLT and HIPG describing the services they were providing for the development of the SME sector and the economy of Sri Lanka. The panel was represented by Mr Kanishka Weerasinghe Director General Employers Federation of Ceylon, Mr Athulla Edirisinghe – Managing Partner, Strategic Management Alliance, Mr Damith Gangodawilage – Managing Director Taxperts Lanka, Mr Chaminda Rusiru Maliyadde - President The Hambantota District Chamber of Commerce ( HDCC), Ms Sashika De Silva Director, Sales & Marketing, Cinnatopia, Mr Nishantha Gamage Marketing Manager Hambantota International Port Group, Mr H W Kelum Priyantha Manager Business Development Sri Lanka Telecom and Mr. Upasena Dissanayake Chairman - Industrial Development Board of Ceylon
The session was Moderated by Mr Chaaminda Kumarasiri – Chairman HCP Consulting, Management Consultant.
After the panel discussion and the concluding remarks the participants were invited for lunch in the banquet hall.