It’s time to formalize exporting SMEs, according to EDB chief

By Charumini de Silva

Export Development Board (EDB) Chairman Suresh de Mel recently said the current unprecedented period is an opportunity to formalize small and medium-sized enterprises (SMEs), noting that half or more are engaged in the sector. informal.

“SMEs play a major role in most economies, especially in developing countries like ours. However, the tricky part in our country is that most of them are engaged in the informal sector. So now is the time for us to push to bring them into the mainstream, ”he said in a webinar.

The event, titled ‘SMEs seeking to export goods and services to Great Britain’, was jointly organized by the Council for Business with Great Britain and Commercial Bank Plc.

He said most of the exporting SMEs could not get the government to provide financial moratoria, low interest rates and extensive facilities because they were not part of the formal sector and there was not even a data to track them.

The EDB chief expressed concern that the unprecedented increase in gold pledging could be due to SMEs which are generally a vulnerable group.

SMEs represent 42% of GDP, ie 75% of the total number of companies; and 45% of the workforce is employed in the sector. They also represent 20% of exported goods and 30% of the value of production.

Pointing out that there are many practical issues in bringing the informal sector into the mainstream, de Mel stressed that it might take a lot of engagement with them to create awareness.

“This means that we need to raise more awareness of the opportunities and benefits for them to be recognized as a formal business unit,” he said.

The EDB chief said banks can also play a central role in attracting informal SMEs to the general public by organizing awareness workshops through their regional networks.

The chief director of the commercial bank – Export department, Lawrin Somanader, said the bank had disbursed a total of Rs. 105 billion to facilitate SMEs.

“During the first two waves of COVID-19 in the country, we extended the moratorium to more than 15,000 SMEs and more than 5,000 SMEs have benefited from the concessions that we have granted separately,” he added.

Somanader said the bank’s main goal was to provide a financial moratorium, where they extended prime rates, rescheduled loans, and restructured loans to meet their cash flow.

“We have also helped many clients who like exporters to minimize their demurrage. The bank will remain determined to relaunch and support its activities, ”he said.

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