The government has underscored the advantages available to Small and Medium-sized Enterprises (SMEs) that voluntarily register for Value Added Tax (VAT), even if their annual turnover is below the Rs. 60 million threshold.

Deputy Minister of Economic Development Nishantha Jayaweera, speaking to the media, said VAT-registered SMEs, particularly manufacturers, can claim input VAT on raw materials and certain services.

He noted that such businesses can also expand by attracting customers who prefer dealing with suppliers that issue VAT invoices.

“By registering, SMEs not only benefit from input VAT but also attract more customers, as buyers prefer to deal with traders who issue VAT invoices,” he said.

The Deputy Minister added that businesses are allowed to register for VAT voluntarily, regardless of turnover, and that this option strengthens competitiveness and supports SME expansion.

Jayaweera further explained that the government’s decision to keep the VAT threshold unchanged at Rs. 60 million, instead of reducing it to Rs. 36 million, was taken after considering the economic impact of Cyclone Ditwah last year and the Middle East crisis, which drove up fuel costs and commodity prices.

He stressed that while the move protects smaller businesses from additional tax burdens, voluntary VAT registration remains a strategic pathway for SMEs to grow and integrate more effectively into the formal economy. (Newswire)

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Deputy Minister of Industries Chathuranga Abeysinghe says the government has established a new Credit Guarantee Institution to assist small and medium-scale enterprises (SMEs) struggling with loan repayments since Sri Lanka’s economic crisis.

Many SMEs had faced severe debt issues over the past few years, with several unable to service or restructure their loans, leading to the risk of asset seizures by banks, he said. 

However, with the intervention of the banking sector and the Ministry of Industries, a large number of businesses were successfully restructured this year, Abeysinghe noted. 

To prevent similar crises in the future, the government has introduced the Credit Guarantee mechanism, with up to Rs. 15 billion in guarantees available. Under this scheme, the government will bear 70% of the risk, while banks will assume 30%, enabling financial institutions to provide loans more confidently.

Deputy Minister Abeysinghe clarified that the scheme is not designed for startup businesses or those lacking formal accounts or verifiable cash flow. Instead, it is intended for existing enterprises seeking to expand their operations.

So far, 728 small and medium-scale businesses have benefited from this initiative, receiving a total of Rs. 4 billion in loans. The applicable interest rates align with the prevailing rates offered by commercial banks.

In addition, under the SMILE III concessionary loan scheme operated by the Ministry of Industries, borrowers can access loans at an 8% interest rate, with a two-year grace period and a ten-year repayment term, although collateral is required.

The Deputy Minister noted that the eligibility for such financial support depends on the organizational strength and financial discipline of each enterprise. He added that ministry officials across the country are assisting entrepreneurs in improving business structures to meet these standards.

He further stated that the government is working on creating new financial models to help startups secure capital over the next few years. (Newswire)

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Opposition Leader Sajith Premadasa met with a delegation from the Asian Development Bank (ADB) at his office, where he once again raised the challenges faced by Sri Lanka’s small, medium, and micro-scale entrepreneurs.

The ADB team included Country Director Takafumi Kadono, Senior Country Economist Lilia Aleksanyan, and Finance Sector Specialist Uresha Walpitagama.

During the meeting, both sides held detailed discussions on the current state of the Sri Lankan economy. Subsequently, representatives of small and medium-scale entrepreneurs were given the opportunity to meet the ADB officials directly and present their issues firsthand.

MP Premadasa stressed that entrepreneurship is the driving engine of national economic growth and that empowering SMEs is vital for recovery and job creation. 

He further noted that according to the Department of Census and Statistics, small and medium enterprises (SMEs) have faced numerous challenges in recent years, resulting in the closure or bankruptcy of nearly 260,000 businesses by 2022.

The Opposition Leader also warned that many more SMEs risk collapse by December 31, 2025, if immediate support measures are not introduced. 

He urged the ADB to extend assistance to help struggling enterprises revive operations and sustain employment across the country. (Newswire)

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Sri Lanka has displayed exclusive products of 11 Sri Lankan Giftware and Lifestyle companies at the HKTDC Hong Kong Gifts & Premium Fair 2025 held in Hong Kong recently.

The Sri Lankan Giftware and Lifestyle sector blends traditional craftsmanship with modern techniques, producing unique items such as batiks, handloom textiles, wooden products, ceramic products, bamboo and rattan products with annual export revenue over USD 60 Mn.  

According to the Export Development Board (EDB), most of the potential exporters can be categorised under the SME category, which provides direct employment for over 200,000 people, including Artisans.

Given the importance of exploring opportunities in the international market for this sector, Sri Lanka’s EDB, in collaboration with the Hong Kong Trade Development Council (HKTDC), organised an EDB stall at the fair, which was manned by the EDB to display the unique giftware and lifestyle products.

The HKTDC Hong Kong Gifts & Premium Fair was held from 27th to 30th April 2025 at the Hong Kong Convention and Exhibition Centre in Hong Kong.

Sri Lankan companies that displayed their products at the EDB Stall at the fair, include Trickledown (Pvt) Limited, Leila Lanka (Pvt) Limited, Novel Ceramic (Pvt) Limited, Candle House Ceylon, Mana Ceylon Manufacturers Pvt Ltd, Crafter’s Collection, Sena Eco (Pvt) Limited, Kalutara Ceramic, Dilanka Porcelain Center, Ceylon Brushtech (Pvt) Limited and Kanrich 2nd life. 

In addition, a three-member trade delegation comprising representatives from Dazzle, Sena Eco (Pvt) Ltd, and Josephs Foundation (Pvt) Ltd participated in the fair to explore new trade opportunities and international connections.

The EDB stall drew substantial interest from international buyers, importers, and distributors, particularly those seeking sustainable and eco-friendly giftware solutions. Over 100 visitors engaged with the Sri Lankan stall, expressing strong interest in ceramic items, coir products, plant-based paper goods, and upcycled products.

Adding to the significance of the event, Mr. Derek Hung, Honorary Consul for Sri Lanka in Hong Kong, visited the stall at the invitation of the Sri Lankan Embassy in Beijing. He facilitated a meeting with members of the Sri Lankan community in Hong Kong, where discussions were held on mobilising the diaspora to support the promotion of Sri Lankan products in future events.

Sri Lanka’s participation in the HKTDC Gifts & Premium Fair 2025 reaffirmed its position as a reliable and competitive supplier of high-quality, handmade, and sustainable giftware products. The fair also provided valuable insights into emerging market trends, innovative design concepts, and new export channels, paving the way for long-term business collaborations.

This initiative marks a significant step towards expanding the international footprint of Sri Lanka’s Giftware and Lifestyle sector. Building on this momentum, the EDB plans to continue this engagement in future editions of the fair, opening doors to new markets and reinforcing Sri Lanka’s presence in the global giftware industry. (Newswire)

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Sri Lanka’s Ministry of Finance has announced a further extension of the suspension for the execution of the Parate law for Small and Medium Enterprises (SMEs).

Issuing a statement, the Finance Ministry said the execution of Parate law, initially suspended until 31 March, has been extended till 31 December 2025.

According to the Finance Ministry, the extension is applicable for SMEs with borrowings below Rs. 25 million.

The extension until 30 September 2025 is applicable for SMEs with borrowings of Rs. 25-50 million. 

The Finance Ministry further said the extension until 30 June 2025 is applicable for those exceeding Rs. 50 million.  

These benefits are available exclusively for SMEs that initiated discussions with their relevant banks before the 31 March 2025, cut-off date, the ministry added. 

Opposition Leader Sajith raised concerns over the Parate law in Parliament yesterday, stating that despite it being temporarily suspended to provide relief to SMEs, the law was now being implemented again.

He further questioned whether the government intends to further extend the suspension of the execution of the Parate law. (Newswire)

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Oxford College of Business (OCB), a leader in education and innovation, has been proudly recognized as the runner-up in the prestigious ACCA Sri Lanka Sustainability Reporting Awards 2025 under the SME Category. This remarkable achievement underscores OCB’s commitment to sustainability and corporate responsibility, solidifying its position as a forward-thinking institution in the education sector.

The ACCA Sri Lanka Sustainability Reporting Awards are a globally recognized platform that honours organizations excelling in transparent and accountable sustainability reporting. The awards celebrate efforts to communicate environmental, social, and governance (ESG) performance, emphasizing the importance of sustainability in shaping the future of businesses worldwide.

“We are deeply honoured to be recognized as the runner-up in the SME category at the ACCA Sri Lanka Sustainability Reporting Awards, and I give all Glory and Honour to Christ alone for this great achievement” said Malindu Ranasinghe, Director/CEO of Oxford College of Business. “This achievement reflects our dedication to embedding sustainability practices in every aspect of our operations and reporting. It’s a testament to the collective efforts of our team and the commitment we have made to foster responsible, sustainable business practices within the education sector.”

OCB’s sustainability initiatives, including their comprehensive reporting practices, demonstrate the institution’s active role in promoting environmental stewardship, social well-being, and good governance. By adhering to rigorous standards and offering transparency in its sustainability efforts, Oxford College of Business has not only set an example for educational institutions in Sri Lanka but also contributed to the global movement toward responsible business practices.

The ACCA Sustainability Reporting Awards provide a platform for organizations to showcase their commitment to sustainability, and being named runners-up in such a respected competition highlights OCB’s leadership in integrating sustainability into its core values and practices.

“At Oxford College of Business, sustainability is not just a buzzword it is an integral part of our mission. Our students and faculty alike are encouraged to adopt innovative solutions that benefit both the environment and the community. This recognition reaffirms the importance of embedding these principles into our organizational DNA,” added Malindu Ranasinghe.

This recognition further strengthens OCB’s reputation as an institution dedicated to excellence, innovation, and social responsibility. Oxford College of Business continues to lead by example, shaping the next generation of leaders who will navigate the complexities of the modern world with sustainability at the forefront of their thinking.

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The Korean Small and Medium Enterprise (SME) Association has expressed its commitment to supporting Sri Lanka in advancing the agriculture sector and enhancing related employment opportunities.

Additionally, the association has agreed to provide technical assistance and training resources essential for the development of the fishing industry.

These topics were highlighted during a meeting held at the Presidential Secretariat today (Nov 13) between a delegation from the Korean SME Association and officials from the President’s Office.

The discussions also focused on training Sri Lankan workers locally for Korea’s fishing industry and creating employment opportunities for them.

The delegation was led by Kim Chung Ryong, President of the Korean SME Association. (Newswire)

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The government has engaged in a special discussion to consider potential steps that could be taken to further support struggling Small and Medium Enterprises (SMEs) before the expiration of the Parate law used for debt recovery.

According to the President’s Media Division (PMD), a special meeting was held at the Presidential Secretariat today (11 Nov) to address relief measures for SMEs facing financial challenges. 

The meeting was led by the Senior Additional Secretary to the President for Finance and Economic Affairs, G. N. R. D. Aponsu, and included officials from the Ministry of Finance, the Central Bank of Sri Lanka, and Sri Lanka Banks’ Association (Guarantee) Limited. 

The discussions focused on the financial difficulties encountered by SMEs due to loan obligations. 

Currently, debt recovery processes under the Parate law have been temporarily suspended for SMEs, with this suspension set to expire on December 15. The meeting considered potential steps that could be taken before the expiration date to further support struggling SMEs.

The meeting also examined ways for the banking sector to provide additional support to SMEs and boost productivity in the economy. 

During the discussions, it was decided to compile a comprehensive report on the loans taken by SMEs from banks. This report will serve as a basis for designing future relief measures.

Additionally, the Central Bank of Sri Lanka and various commercial banks have also commenced evaluating the steps needed for the temporary suspension of debt recovery under the Parate law for SME loans. (Newswire)

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Cabinet approval has been granted to sign the corporation agreement between Sri Lanka’s Export Development Board (EDB) and the International Finance Corporation (IFC) to provide necessary facilities to enable small and medium entrepreneurs to become exporters. 

It was proposed to sign a corporation agreement between EDB and the IFC to provide the facilities under the program for the development of new exporters of the EDB to turn small and medium entrepreneurs with export potential into exporters. 

The clearance of the Attorney General and the recommendations of the Ministry of Foreign Affairs have been received for the said corporation agreement. 

Accordingly, the Cabinet approved the proposal presented by the President, in his capacity as a Minister of Investment Promotion, to sign the proposed corporation agreement between the two parties. (Newswire)

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A new loan scheme with a subsidized interest rate of 7% has been introduced for small and medium enterprises (SMEs), State Finance Minister Ranjith Siyambalapitiya said.

Based on a loan from the Asian Development Bank, the new scheme has an allocation of Rs.50 billion, launched with the view of strengthening small and medium enterprises, he said. 

The Minister made these comments while addressing a media briefing held at the Presidential Media Centre. 

Under this scheme, small and medium enterprises can receive loans up to a maximum of Rs.10 million. 

Additionally, Rs.6 billion will be allocated for the development of small tea gardens, and Rs.2 billion will be designated for women entrepreneurs, the Minister said. 

The Minister revealed these details, commenting on the positive steps taken by the Government in its economic recovery efforts. 

In March this year, the ADB approved a $100 million loan to provide SMEs in Sri Lanka more access to finance and build their resilience to external shocks, such as the economic crisis and climate change. (Newswire)

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The Cabinet of Ministers has approved a joint proposal submitted by the President and the Minister of Industries to establish a new entity named “Enterprise Sri Lanka” to support small and medium-scale entrepreneurship (SMEs).

This entity will focus on restructuring the institutional and legal frameworks of several existing organizations, including the Export Development Board, National Entrepreneurship Development Authority, Industrial Development Board, Sri Lanka Export Credit Insurance Corporation, and the Small Enterprises Development Division of the Ministry of Sports and Youth Affairs.

Accordingly, the Legal Draftsmen have been instructed to formulate a draft bill to facilitate this process, the government said.

This decision was made after a comprehensive review of international best practices and in recognition of the need for a consolidated agency to monitor and develop SMEs more effectively. (Newswire)

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The Asian Development Bank (ADB) has approved a $100 million loan to provide small and medium-sized enterprises (SMEs) in Sri Lanka more access to finance and build their resilience to external shocks, such as the economic crisis and climate change.   

“SMEs play a critical role in Sri Lanka’s economy, contributing 52% to the country’s gross domestic product and employing 45% of the population,” said ADB Senior Financial Sector Specialist Manohari Gunawardhena. “It is therefore important to provide SMEs, particularly women-led enterprises, with the necessary support to sustain and grow the sector’s contribution to the economy. This project will provide working capital and improve SMEs’ access to finance, helping them expand operations and prepare for the changing environment.” 

Issuing a statement, the ADB said that through participating financial institutions, it will open a $50 million line of credit for underserviced SMEs in the export, tourism, technology, agriculture, and manufacturing sectors. 

ADB will establish a $500,000 special facility to cover guarantee subsidies for women-led SMEs. A gender gap assessment will be conducted with a view to improving women’s access to finance.  

The project will build on the government’s equity contribution through the National Credit Guarantee Institution Limited (NCGI), which provides partial credit guarantees on loans to SMEs. ADB will help the NCGI adopt procedures to effectively support SMEs including underwriting guarantees, risk management and risk-based pricing, and guarantee recovery operations. The project will incorporate green finance elements through climate adaptation and mitigation measures for SMEs.  

ADB added that it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. (NewsWire)

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Small and medium enterprises (SMEs) in Sri Lanka are set to benefit from the newly established Secured Transactions Registry (STR), which aims to facilitate the use of moveable assets as collateral for loans while ensuring financial stability and fostering economic growth in the country, according to the International Financial Corporation (IFC) of the World Bank Group.

With technical assistance from the IFC, the new Secured Transactions Registry Act aims to address legal and operational challenges in the existing law. This is a collective effort led by the Credit Information Bureau (CRIB), in collaboration with the Central Bank of Sri Lanka and the Ministry of Finance.

SMEs comprise more than 75 per cent of enterprises while accounting for 45 per cent of employment and 52 per cent of the country’s GDP. Yet they cite access to finance as one of the key obstacles, hindering their growth potential. Against this backdrop, a robust legal framework to register security interests over movable assets will help unlock the full potential of small businesses in Sri Lanka through easier access to loans.

“The enactment of the new law and consequential amendments to 7 related laws is a critical step in developing a fully-fledged secured transaction framework to mortgage moveable assets in Sri Lanka that protects the rights of all types of regulated financial institutions, encouraging them to provide financing secured by moveable collateral,” said Pushpike Jayasundera, Director/General Manager, Credit Information Bureau of Sri Lanka (CRIB).

Globally, businesses are restricted from using movable collateral (such as machinery, inventory, accounts receivables, crops, and equipment) to obtain financing because many countries do not have functioning laws and registries to govern secured transactions. Secured transactions reform is also an avenue that can help encourage women—they are more likely to have movable assets to pledge—to start or expand a business.

“An effective credit infrastructure is key to strengthening Sri Lanka’s financial sector. IFC assisted CRIB in drafting the new law, which incorporated several rounds of consultations and expert input, thus ensuring that small businesses and entrepreneurs with few fixed assets can obtain the financing they need to thrive. We greatly appreciate the perseverance and commitment of all the stakeholders to see this legislation come to fruition,” said Alejandro Alvarez de la Campa, IFC Country Manager for Sri Lanka and Maldives.

IFC’s efforts to improve access to finance and foster inclusion in Sri Lanka span across several initiatives. Apart from supporting secured transactions regimes, IFC helped the Central Bank of Sri Lanka launch the country’s first national financial inclusion strategy and develop a financial literacy roadmap, strengthening financial consumer protection and increasing the uptake of digital finance.

About IFC

IFC—a member of the World Bank—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, the IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org (NewsWire)

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Minister of Justice Wijeyadasa Rajapakshe has disclosed plans to introduce an amendment concerning the temporary suspension of Parate execution, indicating its imminent presentation to Parliament. 

He pointed out that this proposed legislative change signifies a proactive approach towards addressing legal matters crucial for the country’s governance and justice system.

Minister Rajapakshe also highlighted the anticipation of implementing a distinct loan scheme tailored specifically for Small and Midsize Enterprises (SMEs). 

He revealed that this initiative aims to bolster the economic prospects of smaller businesses, contributing to overall economic resilience and growth.

“The staggering amount of loans extended by two state banks, totalling approximately Rs. 602 billion, presents a daunting challenge. Much of this sum is destined to be written off as bad debt due to non-payment. Had these funds been allocated towards agriculture and industry, significant strides in growth could have been achieved. This predicament underscores the necessity for stringent financial controls within the country to ensure optimal utilization of resources and sustainable economic development. 

“To prevent crises for businesses and financial institutions, proactive measures are essential. Therefore, steps must be taken to alleviate the challenges associated with Parate execution. Plans are underway to propose amendments to Parliament regarding Parate execution to address these concerns,” the Justice Minister said. 

He added that a separate loan scheme tailored for Small and Midsize Enterprises (SMEs) is on the agenda, with President Ranil Wickremesinghe lending his support to this initiative.

The minister further emphasizes the government’s steadfast dedication to advancing legal reforms and providing support to SMEs, thus affirming its commitment to national progress and prosperity.

Minister Wijeyadasa Rajapakshe made these announcements during a press briefing held at the Presidential Media Centre on Tuesday (Feb 27).

The full statement of Justice Minister Wijeyadasa Rajapakshe;

A nation’s fiscal policy is integral to its economic strength. The central bank holds significant authority in shaping this policy landscape. Reflecting on discussions surrounding Parate execution in Sri Lanka, it becomes apparent that the central bank’s focus is primarily centred on safeguarding the stability of financial institutions. However, concerns have been raised regarding whether sufficient attention has been paid to the country’s overall balance sheet, especially amidst declines in the agricultural sector from 22% to 8% and the industrial sector from 38% to 32%.

Despite borrowing from the International Monetary Fund (IMF) on 17 occasions, the economy has struggled to regain its footing. A notable trend has been the continuous expansion of the service sector at the expense of neglecting the industrial sector, resulting in decreased production capacity. This imbalance has impeded the nation’s economic recovery and overall growth trajectory.

The staggering amount of loans extended by two state banks, totalling approximately Rs. 602 billion, presents a daunting challenge. Much of this sum is destined to be written off as bad debt due to non-payment. Had these funds been allocated towards agriculture and industry, significant strides in growth could have been achieved. This predicament underscores the necessity for stringent financial controls within the country to ensure optimal utilization of resources and sustainable economic development.

To prevent crises for businesses and financial institutions, proactive measures are essential. Therefore, steps must be taken to alleviate the challenges associated with Parate execution. Plans are underway to propose amendments to Parliament regarding Parate execution to address these concerns. 

Additionally, a separate loan scheme tailored for Small and Midsize Enterprises (SMEs) is on the agenda, with President Ranil Wickremesinghe lending his support to this initiative.

Furthermore, the government aims to implement a low-interest loan program for SMEs, collaborating with key financial institutions like the World Bank and the Asian Development Bank. Recognizing the importance of responsible lending, discussions with the Cabinet have led to the decision to establish a monitoring system for credit facilities. Future deliberations with the Ministry of Finance are also anticipated to refine these strategies further. (NewsWire)

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Cabinet approval has been granted for the implementation of a Rs. 20 billion credit scheme to revive the micro, small and medium enterprise sector in Sri Lanka.

According to the government, the proposed Rs 20 billion will be spent on the entire project which has two components. 

Out of this, Rs. 15 billion will be used to strengthen existing and new enterprises and the remaining amount of Rs. 05 billion will be used to support enterprises under the non-performing loan category. 

The government states a significant number of small and medium-scale entrepreneurs involved in manufacturing, import, export, tourism, apparel and various other commercial operations have found it very difficult to continue running their enterprises as a result of the economic downturn and the impact of external factors beyond their control. 

The Asian Development Bank (ADB) has agreed to provide working capital support for the small and medium enterprise sector as a relief. 

The proposed program is intended to provide credit facilities to existing micro, small and medium-scale enterprises for further expansion and recovery of their businesses through licensed commercial banks and licensed specialized banks at concessional interest rates. 

Accordingly, the Cabinet has approved the proposal presented by the President in his capacity as the Minister of Finance, Economic Stabilization and National Policies to implement the said project. (NewsWire)

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The European Union Ambassador for Sri Lanka and the Maldives, Carmen Moreno, met with micro, small, and medium-scale businessmen at the office of the Leader of the Opposition today (Feb 16).

During the meeting, facilitated by opposition leader MP Sajith Premadasa, the ambassador learned about the various challenges faced by small- and medium-sized businessmen and entrepreneurs in this country.

On this occasion, the micro, small, and medium businessmen also provided a detailed explanation to the ambassador about how their businesses collapsed due to the Easter attack, the Covid epidemic, and the country’s bankruptcy. They highlighted the distressing situation of their businesses being auctioned off through the parate law.

MP Sajith Premadasa presented government statistics to the EU Ambassador for Sri Lanka and the Maldives, detailing the number of micro, small, and medium-sized businesses in Sri Lanka that had closed due to these crisis scenarios. 

The opposition leader further emphasized the need to defend these businessmen, who account for 52% of employment and more than 50% of the nation’s GDP.

A group of representatives of micro, small, and medium businessmen and entrepreneurs, along with Member of Parliament Niroshan Perera, also joined the occasion. (NewsWire)

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In a pioneering move to bolster the small and medium-sized enterprise (SME) sector in Sri Lanka, the apex body of the ICT industry, FITIS, has unveiled the “DigiGo” Digital Playbook for SMEs. 

According to the President’s Media Division (PMD), the launch event took place at a press conference recently at the President’s Media Centre, (PMC). 

Organized by the FITIS Digital Services Chapter, in collaboration with LKDomain Registry and under the patronage of the Ministry of Industries & Plantation Industries, as well as the Ministry of Technology, DigiGo aims to serve as a comprehensive resource for SMEs seeking affordable local digital services, guiding them on their journey towards digital transformation.

Addressing the gathering State Minister of Technology, Kanaka Herath, emphasized the pivotal role of technology in propelling the growth of the SME sector. He underscored how technology can provide solutions to the common challenges faced by SMEs, including accessing seed capital, expanding into new markets, overcoming resource constraints and addressing logistical issues. He also expressed his enthusiasm for collaborating with FITIS to launch the DigiGo initiative, which he believes will significantly enhance the SME sector in the country.

Furthermore, the Minister highlighted that the government has initiated the “Digicon 2030” program, with the primary objective of formulating a national digital economic policy for the year 2030. This initiative was a collaborative effort between the Ministry of Technology, the industry and the support of the World Bank (WB). The resulting document was officially presented to President Ranil Wickremesinghe. Notably, SMEs have been identified as one of the six key pillars in shaping the digital economy strategy. This underscores the importance of supporting SMEs in achieving the objectives of the digital economic strategy.

The State Minister of Technology acknowledged the prevalent challenge of limited digital education among SMEs, especially those outside major urban centres like Colombo and Kandy. In response, DigiGo will serve as a guiding resource, enabling SMEs to explore available digital platforms and fully embrace the advantages of going digital. The program plans to host quarterly DigiGo events in all 25 districts by 2030, ensuring the widespread dissemination of digital knowledge.

With the recent launch of DigiGo, Minister Herath emphasized its role in promoting awareness about digital transformation and the benefits it offers to all SMEs in Sri Lanka. The DigiGo digital playbook, unveiled during the launch, serves as a unique platform showcasing a wide array of available digital services, creating opportunities for business growth and expansion in the digital sphere. 

The inaugural event, scheduled to commence on October 20th in Galle, is planned to expand its reach to all 25 districts through collaboration with local business communities. FITIS, in partnership with the Ministry of Technology and various public and private stakeholders, will facilitate these sessions, aimed at empowering SMEs to embrace the digital era and unlock their full potential.

In a significant development, Ms. Chio Kenda, the World Bank Country Manager for Maldives and Sri Lanka, unveiled the “DigiGo Innovate Digitally to Succeed” initiative during her speech. She underscored the potential for digital development to address both global and local challenges, emphasizing its role in job creation, market expansion and the enhancement of access to finance. As Sri Lanka navigates its way out of an economic crisis and sets forth on the path to recovery, the strategic development and implementation of a national business strategy by 2030 are deemed crucial steps.

On a global scale, the digital economy presents substantial opportunities for SMEs to make significant contributions to national incomes. In the year 2023, business-to-consumer e-commerce recorded sales of nearly US $6 trillion. With over 1.7 million SMEs propelling economic growth in Sri Lanka and driving employment, they collectively represent approximately 90% of all businesses in the country. They are responsible for providing 45% of the nation’s employment opportunities and contribute to almost half of the country’s GDP.

However, SMEs, whether on a global scale or in the Sri Lankan context, face distinctive challenges when it comes to embracing digital transformation. These challenges include constraints related to limited resources, knowledge and digital expertise. Such limitations hinder the potential for business growth, innovation and the attainment of economic and social inclusivity. To address these common challenges, the Digital Goal Programme has been established as a collaborative endeavour, featuring active participation from the private sector, government and local stakeholders, with the essential support of relevant partners.

In her address, it was disclosed that the World Bank takes pride in its role as a knowledge partner in this digital program and applauds the central focus on decentralizing SMEs within the upcoming national digital strategy. The institution has committed to providing ongoing technical support to both the government and the private sector as they collaborate to shape the 2030 strategy for a digital Sri Lanka. These collaborative efforts are aimed at boosting economic competitiveness, fostering skills development and ultimately facilitating the creation of higher-paying jobs within the country.

The inaugural DigiGo event, which is regionally planned, is scheduled to take place on October 20th in Galle, under the guidance of Dr. Ramesh Pathirana, Minister of Industries & Plantation Industries, and Kanaka Herath, State Minister of Technology. The World Bank’s support for this event underscores its commitment to advancing Sri Lanka’s digital transformation in alignment with the nation’s digital economy strategy.

Mr. Indika De Zoysa, Chairman of FITIS, unveiled the ground-breaking DigiGo initiative, highlighting the myriad opportunities it offers through digital technologies. DigiGo, from data analytics to e-commerce, aims to provide SMEs with a platform for knowledge sharing, featuring insights from industry experts and thought leaders on emerging trends, best practices and strategies driving digital innovation.

SMEs, which contribute 52% to Sri Lanka’s GDP and represent over 75% of businesses, have long been the backbone of the economy, offering 45% of employment and contributing 20% to exports, as per the Asian Development Bank (ADB). Acknowledging their pivotal role in the nation’s economic revival, the government has designated them as a key pillar in the “Digital Economy Strategy 2030.” DigiGo is poised to propel Sri Lanka’s digital economy by bridging the technology-business gap, and fostering a thriving digital ecosystem, with a special focus on the 1 million+ SMEs across the island.

The event was attended by Professor Gihan Dias, a founder member of DigiGo, Omar Sahib, President of the FITIS Digital Services Chapter, Chief Executive Officer of LankaPay Chandran De Silva and other officials. (NewsWire)

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Several companies of the Board of Investment (BOI) and Small and Medium Enterprises sector are expected to downsize or suspend operations following the April New Year, it was reported.

According to the Sunday Times, at least 30 per cent of BOI companies are downsizing and many are unlikely to re-start operations after the New Year holidays this year and 40 per cent of those in the SME sector are also on the brink of downsizing and closure.

Newly-appointed Manufacturers Association (MA) Chairman Dhammika Fernando stated this was due to Sri Lanka’s slow economic recovery, and the global economic downturn resulting in a lack of orders and business shifting to other regional areas. 

The rising cost of production, making Sri Lanka about 25 per cent more expensive than other countries, has also resulted in the nation losing its competitive advantage, he said. 

Dhammika Fernando also pointed out that logistics issues, such as the gazette issued concerning the imposition of new additional charges on freight costs and taxes targeting exporters have severely affected companies. 

He also stated that about 30,000-  50,000 jobs are likely to be lost in the first half of this year, but some sections of the business community believe the conditions will improve in the second half. (NewsWire)

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