Sri Lanka’s small and medium enterprise sector owes the local banking system more than Rs. 469 billion in non-performing loans, according to President of the Sri Lanka Chamber of Small and Medium Industries (SLCSMI) Prof. Rohan de Silva.
He said the loans have accumulated since the COVID-19 pandemic and, together with accrued interest, are placing severe pressure on SMEs attempting to restart their businesses.
Addressing a special press conference this evening, Prof. de Silva noted that the banking sector records substantial annual profits and proposed that banks absorb a portion of the losses. He also called on banks and the government to jointly establish a special financing mechanism, or Bad Bank, to support distressed SMEs.
He further suggested that a portion of Employees’ Provident Fund and Employees’ Trust Fund resources could be deployed as capital for the proposed Bad Bank, with the funds to be reimbursed once SMEs begin repaying their dues.
“Small and medium enterprises are the backbone of our economy, yet access to affordable finance remains their biggest challenge,” said SLCSMI Senior Vice President C. Fernando.
“Our future plan focuses on low-interest SME credit lines, state-backed loan guarantee schemes, and simplified banking procedures.”
Immediate past President M. Carder said special attention would be given to startups, women-led enterprises, rural businesses, and export-oriented SMEs.
“Financial inclusion and cash-flow stability will be treated as national priorities,” he said.
Source – https://hirunews.lk/en/445739/non-performing-sme-loans-exceed-rs-469bn