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Asia’s small-and-medium-sized enterprises (SMEs) need finance to help them grow into dynamic, internationally competitive companies. This is key to strong, sustainable growth in Asia as the world recovers from the recent global economic slowdown, says a new report from the Asian Development Bank (ADB).

“Asia has millions of SMEs but few of them are able to grow to the point where they can innovate or be part of the global supply chain. To do this, they need more growth capital and opportunities to access various financing channels,” said Noritaka Akamatsu, Senior Advisor in ADB’s Sustainable Development and Climate Change Department, which produced the report.

As of the end of 2013, Sri Lanka had 132,483 SMEs, which contributed a third of the country’s gross domestic product, 30% of its value-added manufacturing output, employed 35% of Sri Lanka’s labor force and provided 20% of the value of the country’s exports. The island nation has a further 880,066 micro enterprises, the report said.

“Banks in Sri Lanka have taken steps to assist SMEs by providing not only credit but also advisory services. The top 13 commercial and development banks provided Rs.54.6 billion in loans to SMEs in 2013, up 106% from 2012. However, very few mid sized firms are listed on the Colombo Stock Exchange and venture capital funding is of a small scale,” the report said.

It added that limited access to bank credit is a persistent problem in Asia and the Pacific. Lending to SMEs has declined over the course of the global financial crisis and in 2014, they received only 18.7% of total bank loans.

The Asia SME Finance Monitor 2014, which assesses 20 countries in developing Asia, noted that SMEs make up an average of 96% of all registered firms and employ 62% of the labor force. However, they contribute only 42% of economic output.