Creating an Enabling Environment for SMEs in
Sri Lanka – The Role of the Public Sector.
Presented by Azmi Thassim, Past President,
Hambantota District Chamber of Commerce
Small and Medium Enterprises are recognised
throughout the world as a very important part of the
economic and social structure of a nation.
 Services to the community
 Creating employment opportunities
As this is true of the Sri Lankan situation too,
creating an enabling environment for SMEs in Sri
Lanka is vital.
In Sri Lanka, it is the public sector (being the primary
regulator), that has the authority, responsibility and
also the capability to create this environment.
Three key bodies hold this mandate
1. Parliament of Sri Lanka – Acts and Legislation
2. Provincial Councils of the nine provinces – Statutes
3. Local authorities around the country (which come to
more than 300) – By Laws
The public sector in Sri Lanka has been unable to optimise
it’s contribution towards the creation of the best possible
environment for SME’s.
The way forward;
 Establish a Ministry specifically focussed on Entrepreneurship
and SMEs.
 This ministry will work towards harnessing the powers within
the key bodies in delivering the best outcome for SME’s.
 Avoid duplication of tasks by clearly demarcating responsibilities
effecting SME’s.
 Devolve authority to provincial & local bodies
 Learn from regional success stories from our neighbours and
adapt to suit our needs.
The way forward ..continued
 Knowledge, understanding and attitudes of the civil society
regarding SME development should be improved.
 Aspects of entrepreneurship should be taught to people following
courses in vocational training centres.
 Invite educators and capable professionals to volunteer.
 Provide opportunities for international study tours & learning
exchange programmes.
 Amend labour laws to suit requirements in keeping with the times.
(Gratuity, EPF legislation etc.)
 Access to credit at reasonable cost (i.e.: 5%-6%).
 Offer assistance to SME’s to offset initial set up and start up cost by
way of lower tax thresh holds, training and/or subsidies.
And last but not least…
 Establish a continuous consultation process with the
SMEs by inclusive representation
 This can be achieved by regional chambers of commerce
by formalising SME’s into groups and associations thus
giving them power and recognition.
 The public sector should allow adequate representation
through the chambers of commerce when formulating
laws or offering incentives to SME’s. This will improve
effectiveness and efficiency.
The End