"Funds do not flow smoothly from the banking sector to the SME sector due to the communication gap between banks and businesses," L Somaratne, IFC Program Advisor told reporters.
"Most SMEs are not aware of the facilities available from the banking sector.
A banking road show is to be held in May to educate SME owners on the services banks provide for small businesses.
The banks will stress on correct procedures in applying for loans, business planning and creating finance proposals during the sessions. Small businesses are often unable to provide credible financial records on operations that are mandatory when getting loans.
A report by IFC, the private sector arm of the World Bank, says around 61 percent of SMEs surveyed in Sri Lanka said that access to finance was their biggest stumbling block for development.