‘State sector red tape stifling SMEs’

(L to R) Colin Fernando, Prof. Rohan de Silva, Mohideen Cader and Chaminda Kumarasiri Pic by Kamal Bogoda

By Steve A. Morrell

The SME sector, contributing $ 48 billion to the GDP, is stifled by government red tape. SME entrepreneurs and industrialists who wish to commence ventures have to often be in waiting for years before such projects are approved by relevant government bodies.

Some give up in disgust after suffering irretrievable losses because of being shunted from one desk to the other, to have their projects approved. Additionally,  rampant corruption compounds the  frustration such entrepreneurs have to endure if and when their projects are approved for implementation.

The above disquieting findings were revealed recently at a press conference convened by the Sri Lanka Chamber of Small and Medium Industries.

The head table included president of the Chamber, Prof. Rohan de Silva, Immediate Past President Mohideen Cader, Management Consultant, Chaminda Kumarasiri and Senior Vice President Colin Fernando.

Prof. de Silva introducing the subject to be discussed said the Chamber was 57 years in existence, having commenced in1953. He said the SME sector contributes 60 percent  to the  revenue of the country. The Chamber works with any government and cooperates with the state to promote the interests of the SME sector.

De Silva said the Chamber was a non profit organization and adhered to its motto, ‘Be Sri Lankan, Buy Sri Lankan’. He expressed his thanks to Minister Wimal Weerawansa who granted the Chamber an interview within two days of assuming office to discuss matters  that require the minister’s intervention.

Management Consultant Chaminda Kumarasiri said there were three serious  matters that require official attention. Red tape, cash flow and collateral. Red tape was the most frustrating factor when seeking sanction for a project.

Quite often, because of these frustrations an entrepreneur would abandon a project, often ending in penury. His jeopardized cash flow also obstructed an entrepreneur’s progress. Banks were reluctant to lend, considering the interminable papers that had to be completed before such projects even got started.

Of importance was also the fact that when state personnel changed, policies also changed, resulting in lack of continuity.  Such changes caused confusion to small holders who were usually of rural origin.

Vice President Colin Fernando said although the corona pandemic caused restrictions to entrepreneurs, official support was imperative if the sector was to contribute to the economy. He said China’s progress from a backward country to that of a world economic power was instructive. Chinese policies if applied in the Sri Lankan context could prove effective.

Immediate Past President Mohideen Cader confirmed government support was an immediate necessity and said the Chamber was now a fully contributory entity to the government’s export business. The Chamber was responsible for  continuous progress of the SME sector and cannot be ignored.

He added that entrepreneurs of the North of the country who were saddled with serious odds also required official support.