Hand with pen pointing to SME (Small and Medium Enterprises)

The Government which has already launched a SME Policy Framework, is planning to set up an Advisory Council comprising of a ‘Think Tank’ at the National Level to strategise the promotion and development of Small and Medium Enterprises (SMEs), informed sources said.

The island’s SME’s, widely regarded as the backbone of the economy is estimated to account for more than 75% of the total number of enterprises providing 45% of the employment and contributes to 52% of the Gross Domestic Production (GDP).
The Advisory Council will be tasked to come up with new ideas, proposals and strategies for setting up of appropriate Industrial Zones/Estates, common services facilities, entrepreneurship village development programmes, market facilitation programmes, financial support initiatives, venture capital models and other initiatives to strengthen SMEs. Also, the Advisory Council will re-examine the viability of sick industrial entities in coordination with the banks, and guide and support in the implementation of suitable rehabilitation packages.

“The SME Policy Framework broadly sets out the policy direction, the challenges to be addressed and the broad intervention strategies. The major policy intervention areas are identified into six core areas namely enabling environment, modern appropriate technology, entrepreneurial culture and skills development, access to finance, market facilitation and research and development.

Also it is important to focus on the regional balance and resource efficiency in developing SMEs,” Secretary to the Ministry of Industry and Commerce, T M K B Tennakoon said last week announcing that a draft action plan towards implementing the policy paper has already been prepared.

Meanwhile, the government is also looking at setting up strategically important SME cluster committees to discuss the problems of the clusters, areas where assistance is needed, and dialogue and discuss the progress of sectors and assist in formulating of strategies and implementation programs.

The SME Policy Framework states that these cluster committees or panels will comprise of representatives of Ministries and Department, statutory bodies, private sector, chambers, industrial associations, academia and representatives of the relevant sector of the industrialists.

The cluster committees will initially focus on high potential promising sectors identified in the National SME Policy Framework, which aims to support start-up SME enterprises, strengthen the existing enterprises and extend nursing programmes for potentially viable sick SMEs.

According to the Ministry, the term SME is used to denote micro, small and medium enterprises. Different countries use different definitions for SMEs based on their level of development. The commonly used yardsticks are total number of employees, annual turnover and total investment. In the Sri Lankan context, the SME policy framework defines SMEs based on the number of employees and annual turnover

The category of SMEs is made up of a enterprises which employ less than 300 employees and which have an annual turnover not exceeding Rs.750 Mn. In this context, micro enterprises are also read with SMEs for any policy related measures.