Sri Lankan government launch Enterprise Sri Lanka programme this March
Finance Minister Mangala Samaraweera has reportedly said that Enterprise Sri Lanka, which is one of the main proposals made in the 2018 Budget aimed at creating entrepreneurs in the country, will be launched in March this year.
The Minister has said that it would create the possibility of the recipients being given an interest subsidy up to 75% of the effective interest rate.
The Finance Ministry issuing a news release has stated that the Sri Lankan government expects to disburse Rs. 60,000 million through state and private banks to would-be entrepreneurs and another Rs. 5,000 million has been set aside by the Treasury to reimburse the interest subsidy to the banks.
Under this scheme 15 different loan schemes have been proposed for young entrepreneurs in the fields of agriculture, fisheries and small and medium enterprises. This scheme includes journalists and those who are self-employed as well.
“In addition to young entrepreneurs, women and differently abled persons will also be provided with a special opportunity to take part in this program. Women and differently abled persons who come forward to take part in this program will be offered additional interest subsidies of 10% and 15% more respectively,” the Ministry has stated.
The women will have to form a company with at least 10 equity shareholders and each shareholder will have invested at least Rs. 10,000. The Government will extend a comprehensive support package which includes both non-financial and financial assistance including grants and credit through the enterprise Sri Lanka credit schemes to these companies.
The Finance Minister has already held a discussion with the heads and chief executive officers of state and private banks at the Treasury on the matter.
The government expects the SME sector to be the backbone of the economy. However, the lack of capital or the difficulty in accessing capital due to both the cost of capital and the requirement for collateral have been the main impediments in the development of startups and SMEs.
Samaraweera has stated that the Government’s objective was to ensure that no entrepreneur was ever denied credit due to the lack of collateral but was able to access financing given the viability of the project proposals.
With the aim of increasing female participation in the field of business and industry, women who join the Enterprise Sri Lanka programme will be given an interest relief of 10% in addition to the 75% interest relief received when granting a loan and 15% extra (surplus) interest relief for specially-skilled individuals with a Treasury bail will be provided by the Government.
The government will also provide non-financial technical facilities for the companies, to which women will have a greater entitlement, including at least 10 participants that start with a minimum capital of Rs. 10,000 from each shareholder.
The government meanwhile will hold 75% of the leasing cost of the machinery under the leasing method by such companies and the Treasury will issue the required bail for the relevant banks.
OSL take:
The Sri Lankan government’s initiative – Enterprise Sri Lanka – will provide a much needed boost to the SME sector as well as local start ups. Also, the incentives offered to women would further boost local businesses. This would provide a great opportunity for investors to link up with local businesses to form joint ventures covering various sectors.
| Article Code : | VBA/AT/20180115/Z_1 |