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Start Small

November 9, 2006 (LBO) – Most local small and medium enterprises lack support services like marketing and technical skills rather than access to credit to grow their businesses, a top Central Bank official said Thursday. Local banks are heavily weighted towards collateral base lending, instead of project based lending, which in turn makes it difficult for smaller firms to access funds.

In fact a report by the International Finance Corp (IFC), the World Bank’s private sector lending arm says around 61 percent of SMEs surveyed in Sri Lanka lamented that access to finance was their biggest stumbling block for development.

To my mind, credit is not the only critical element that affects the business of the SMEs, but the timely availability of support services like marketing and technical skills, Central Bank’s deputy governor Ranee Jayamaha said.

The lack of credit, she says is sometimes ˜an illusion’.

The illusion, if it is, that SMEs cannot grow because of lack of credit should be addressed through effective advice and discuss how to remedy the deficiencies of supporting services which are essential for business expansion, she said addressing businessmen during a seminar to educate

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