A roundtable discussion on the importance of export finance organized by the National Chamber of Exporters (NCE) was held recently.
The discussion was based on a presentation on the research findings of a study conducted by Verité Research in consultation with the NCE.
The study examined the status of the export finance market in Sri Lanka, and identified the key limitations that prevent export finance from playing a proactive role in promoting exports. The study has revealed that access, availability and diversity of export finance instrumentals in Sri Lanka is limited. The few finance products that are available remain weak and are under-utilized.
Export finance instruments including Export Credit Insurance reduce the risks faced by exporters such as country and commercial risks, and enables SMEs manage short-term cash flow issues, and allows exporters to attract buyers by offering better payment terms. By doing so, export finance can help promote exports.
Verité Research finds that the export policy of Sri Lanka has not yet recognized the role that export finance can play in helping Sri Lankan exporters – especially those in the Small and Medium sector – to become more competitive in international trade, and diversify into new products and markets. As such taking steps to improve availability, access, and effective utilization of export finance in the country will be important to back up the renewed expectations for expanding Sri Lanka’s exports to the world. The research finds that government institutions have an important role to play in developing the export finance market in the country, and to enhance effective utilization of export finance instruments.
Participants at the roundtable discussion included government officials from relevant institutions such as the Central Bank of Sri Lanka, Ministry of Finance, Export Development Board, Sri Lanka Export Credit Insurance Corporation, Department of Development Finance, Credit Information Bureau, Trade Finance Association, People’s Bank and the Private sector as well as members of the NCE.