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Small businesses regain financial strength through ADB lifelines
View(s):By Kevin De Alwis
Financial lifelines provided by the Asian Development Banks to Sri Lanka’s small businesses, which faced unprecedented challenges due to the coronavirus disease, have helped them recharge and even expand.
Businessman Sagara Liyanage navigated through those testing times to turn Earth Bound Creations (Pvt) Ltd. into a successful handicraft enterprise. The business employs 300 skilled workers in eight locations.
He got support through the ADB’s Small and Medium-Sized Enterprise Line of Credit Project.
Sagara Liyanage: Spearheading Earth Bound Creations
Mr. Liyanage said: “When COVID-19 hit, we struggled to get the raw materials, such as newspapers, to fulfil our annual requirement, which put us in a position of concern about the future, and that is where ADB came to our rescue with Rs 10 million. They gave us working capital in 2020 under the SMELoC Emergency Response Facility for us to buy raw materials.”
ADB has been a key supporter of Sri Lanka over the years through various initiatives on many levels.
One of the most important sectors in which the ADB has invested is small and medium-scale enterprises.
The Small and Medium-Sized Enterprise Line of Credit Project was introduced in 2016.
Small and medium-scale enterprises in Sri Lanka are crucial pillars of the economy.
Chamini Dinusha: Expanding her dream business of breeding ornamental fish
The ADB’s SMELoC project has supported many businesses with about US$350 million. The strengthening of the Regional Development Bank Project, initiated in 2019 with US$50 million, has provided critical financial lifelines and significantly impacted SMEs across the country.
During a media visit arranged by the ADB to the Kandy District, some of the beneficiaries spoke to the Sunday Times.
More than 10,380 SMEs have benefitted from SMELoC loans, 33% of which were women-owned.
Chamini Dinusha is an inspirational women entrepreneur who got a helping hand from ADB to expand her dream business of breeding ornamental fish and exporting. She started her business in 2018 and named it Aqua Ceylon International (Pvt) Ltd.
Ms. Dinusha received a loan of Rs 4.275 million under the SMELoC scheme and a grant of Rs 475,000 under the Women Entrepreneurs Finance Initiative (We-Fi).
“Thanks to this loan and the grant, we were able to build 170 cement tanks that were desperately needed to expand our business. We can now export good-quality healthy fish to countries such as the US and the UK in larger quantities, all thanks to the push we got through to this project,’’ she said.
We-Fi provides further improved access to finance for women-owned SMEs, blending with ADB’s credit line to foster a supportive ecosystem.
Guided by ADB’s SMELoC project, R.M.S.K. Wimalasooriya transformed her small-scale decorative umbrella business, ‘Chamindu Pooja Bhanda’ into an industrial-level manufacturing business of decorative umbrellas, everyday umbrellas and raincoats.
Ms. Wimalasooriya said: “I started this business in 2007 with the help of my husband as a small-scale decorative umbrella manufacturing business. I was able to provide jobs to more than 150 people and increase my production capability to 50,000 in all of my products thanks to the support ADB gave me.’’
ADB provided a Rs 3.84 million investment loan and a Rs 960,000 grant to Ms. Wimalasooriya. After an ADB training programme, she expanded her range into raincoats and jackets.
R.M.S.K. Wimalasooriya: Expanding her umbrella business
Initially, the funds were designated as investment loans, but following the COVID-19 pandemic, more funds were allocated to address the immediate needs of SMEs.
Lak Vanilla Products is another beneficiary. It has become the largest vanilla producer and exporter in Sri Lanka, thanks to a Rs 3.3 million working capital loan it received from ADB.
Owner M.B. Madugalle has expanded the business, begun more than 22 years ago by his father. He employs 2,500 vanilla farmers around Sri Lanka. They have gone from 1,500 kg a year to collecting a raw vanilla seed harvest of 5,000 plus kg a year and producing nearly 700 kg of vanilla as well as other seasonal crops.
ADB helped and guided businesses that were at the top of their respective industries to establish them as industry leaders.
Trinity Apparel (Pvt) Ltd. is such a beneficiary. It was able to level up its game to become one of the frontline manufacturers of garments for the local women’s and children’s wear market in Sri Lanka, thanks to a Rs 35 million investment loan in 2023. They reduced the cost of production by 4% to 5%, increased production by 20%, and enhanced their income.
Continuing support through the Enhancing Small and Medium-Sized Enterprises Finance Project with an additional US$100 million loan will address the critical needs of SMEs, including those with inadequate or no collateral. The assistance will come through the newly established National Credit Guarantee Institution Limited.
Two other beneficiries: Lak Vanilla Products and Trinity Apparel
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