Financial Times

$100 million SME stimulus plan ready
New SME Bank to be created
Sri Lanka's small and medium entrepreneurs may be in lucks way if a mega project aimed at stimulating the SME economy succeeds in the next few years. A new integrated US$100 million SME economy stimulus package is to be presented for approval to President Chandrika Kumaratunga by the 8-member National Council for Economic Development (NCED) Committee tasked with developing the nation's SME sector. The meeting is scheduled for October 7.

Following an intensive two-month study of the SME sector, the NCED Committee has identified 22 priority issues and developed an integrated solutions plan to solve 133 long-standing issues facing 125,000 SME entrepreneurs in the country, officials said.

The SME Cluster committee has recommended that 1000 Entrepreneur Villages be identified for targeted, integrated development, with a comprehensive programme that provides all available inputs from all SME enabling stakeholders. Entrepreneurial skills will be identified and developed at each village by a team of mentors.

A unified information technology tool based, customer service relationship oriented, Entrepreneur Bank and an Enterprise Equity Fund will also be established with local and foreign stakeholder participation to tap strategic, mission critical inputs and exemplar corporate governance standards. Chris Mahinda Dharmakirti, co-chairman of the NCED SME Cluster Committee, told The Sunday Times FT that, "these two institutions will be an example to the rest of the financial community in its operating philosophy, management focus, and deployment of entrepreneur focused SME enabling services."

He said the Bank will create a world first in combining B2B on-line auction and community based Business Development Services; 24/7 Entrepreneur Empowerment Advisory and Support Services; and a unique multi-lingual portal based on-line account access and loan approval capability.

"The bankers and VCs will not wait for entrepreneurs to come to them, they will go to the enterprise premises and conduct due-diligence in-situ, so that the equity or debt funding requirements are assessed along with gaps in skills, expertise, process management and technology identified early with proactive solutions," he said.

He added that Sri Lankan entrepreneurs around the world will be served by these two institutions, with a particular emphasis to develop our nation's export market access competitiveness, and branded product penetration.

Dharmakirti, a former Vice President of the US$4.5 billion PCCW venture capital fund, is credited with creating over 10,000 millionaire entrepreneurs through the launch of Star TV satellite and cable TV service across 42 countries in 1990, and the global broadband information technology boom in the late nineties with Intel. He is back in Sri Lanka to head the SME Cluster Committee at NCED, and has also been appointed a director of the Employees Trust Fund Board.

The aim is to support a truly cluster-based production system, with sustainable relations developing among the SMEs themselves and between the SMEs and local institutions.

“ It is anticipated that such linkages will develop as integrated networks; between BDS providers and brokers; between large, medium and small-scale enterprises; between the clusters and local governments; and between the local systems and the national support institutions," he said.

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