Small and Medium Enterprise Sector Development Programme (SMESDP)

The design of the Small and Medium Enterprise Sector Development Programme supports and integrated approach in building a dynamic SME sector which;

1. Strengthens the enabling business environment for SMEs
2. catalyzes investment by improving SMEs access to commercial finance
3. enhances the capacity of business development services providers to efficiently and effectively deliver services to SMEs.

1. Credit Assistance programme

The objectives of the SMESDP are to create a dynamic SME sector, enhance it's capabilities and competitive ness, create jobs and, in doing so, reduce poverty. These objectives are to be achieved through an integrated approach which includes a line of credit of US $ 60 million, to participatory credit institutions (PCIs) to improve SMEs access to finance. This line of credit is known as the Sahanya Loan Scheme.

Credit to small and medium sized enterprise through four Banks. (DFCC, NDB, Commercial, and SAMPATH)

The definition of an SME under this programme is that the investment in fixed assets excluding land and building at original book value should not exceed RS 35 million prior to granting of sub-loan and not exceed Rs 70 million on completion of project. The maximum loan amount to any single enterprise will be Rs 35 million. The repayment period would be 10 years including a maximum grace period of 24 months. The interest rate applicable will be the Average Weighted Deposit Rate (AWDR) annouced by the Central Bank biannually. Under the scheme interest rates had ranged between 9.75% and 12% per annum.

Project period - 2002 - 2007
Beneficiaries - SMEs and Banks


Contact person:
Mr. L.S.B. Girihagama - Project Manager
Tel.- 94-11-2436517

2. Business Service Support Facility (BSSF)

The key objectives of BSSF under the SMESDP are to

• Facilitate private sector led business development services (BDS) market growth by promoting demand for an efficient supply of sustainable development services to meet the growth needs of the Small and Medium Enterprise (SME) sector.
• Support and innovative and flexible approach in building the capacity of BDS providers to be responsive to a broad range of SME strategic and operational non loan service needs
• Pursue an integrated approach to establishing effective coordination, interaction, networking and linkages within an expanding BDS provider community, and among those public, private and donor organizations contributing to SME sector BDS expansion.

Under its private sector led and demand focused strategic approach BSSF has entered into programme cooperation agreements with three lead partner organizations, namely the Sri Lanka Business Development Center (SLBDC), the Industrial Services Bureau (ISB), and the Sarvodaya Economic Enterprise Development Service (GTE) Ltd. to create a network of six regional Business Development Centers (Colombo, Kandy, Kurunegala, Matara, Trincomalee and Jafna)(BDCs) to serve as lead BDS outreach facilitators in promoting BDS market growth throughout the country.

Under its Matching Grant Programme , BSSF is currently providing assistance to the SME sector through two types of grants;

BDS Capacity Building Grants - to assist BDS providers to improve existing services capacity and to expand or develop new products and services.

BDS User Grants - to provide SMEs partial funding support for certain types of BSSF approved services (eg; human resources development, business planning, market development, technology sourcing, IT adoption, productivity improvement , and new service/ product development).

Project period - 2002 - 2005
Beneficiaries - Business Development Service Providers and SMEs

Contact person:
Mr. L.S.B. Girihagama - Project Manager
Tel.- 94-11-2436517


03. Small and Micro Industries leader and Entrepreneurs promotion Project III (SMILE III)

Donor - JBIC
Project period - 2005 - 2009

Objective :

To promote stable and balanced economic growth in Sri Lanka through providing capital to small and micro industries, developing managerial, accounting, and technical skills of small and micro industries and strengthening institutional capabilities of intermediary financial institutions.

Scope of the work

a) General Loan

Loans to small and micro industries the projects which shall contribute, either in generating additional productive capacity, in allowing enterprises to enhance their level of operation, in improving the quality of products, and or in improving competitiveness of products.

b) Technical Transfer Loan

Loans to cover the cost of training to develop end-user's technical. managerial, and accounting skills, or to cover the cost of consultancy services and/or to purchase of equipment for quality control.

The proceeds of the loan are available for items (a) and (b). Any balance remaining on the aforementioned items and all other items are to be financed by the borrower.

Target sectors for the Sub-Loans are manufacturing, industrial and services.

Contact person:
Mr. L.S.B. Girihagama - Project Manager
Tel.- 94-11-2436517

04. Environmentally Friendly Solutions Fund II
(E-Friends II)

Donor - Japan
Project period - 2005 - 2009

Objective:

•  To assist enterprises in finding solutions to the environmental problems, such as industrial pollutions caused by their manufacturing and energy consumption, by providing capital through loans to sub-projects whose purpose is to improve the environment and meet the environmental safety standards;

•  To provide financial assistance and to establish a revolving fund to continue financial assistance to environmental sub projects on sustainable basis

•  To assist enterprises in implementing environmentally friendly sub projects by providing loans whose purpose is technical transfer.

Contact person:
Mr. L.S.B. Girihagama - Project Manager
Tel.- 94-11-2436517

Executing Agency
Project Management Unit,
Ministry of Enterprise Development & Investment Promotion
Level 27, West Tower, World Trade Centre
Colombo - 01