Sri Lanka’s first national SME study calls for apex Commission & licensing agency

Sri Lanka’s first ever nation-wide study on the country’s SMEs recommend an apex SME Advisory Commission integrating the three top national SME institutions under one roof. It also recommends Sri Lanka’s first ever SME Industrial Zone, a national SME portal ‘e-platform’, and an SME-only licensing agency on the lines of BoI.

“I wish to thank the German development agency GIZ office in Sri Lanka for extending financial support for this initiative. This study focuses on three aspects-they are the current business environment relating to Small and Medium Enterprises in Sri Lanka the prevailing Institutional Framework supporting the sector and the Regulatory Framework that relates to the SMEs” said the Minister of Industry and Commerce Rishad Bathiudeen addressing the special presentation of the second draft report of ‘Legal and Institutional Study for Creating Enabling Environment for SMEs’ –a study commissioned by the Ministry of industry and Commerce at a cost of Rs 3.2 Mn and conducted by Ernst & Young (E&Y) also focusing on the creation of a more conducive environment for SMEs while transforming them to large scale sustainable business enterprises and linking them to export markets. The validation event was joined by Secretary to the Ministry of Industry and Commerce KDN Ranjith Ashoka, Additional Secretary to the Ministry M.A. Thajudeen, Chairman Director General of NEDA Dakshitha Bogollagma, E&Y Senior Partner Arjuna Herath, GIZ Sri Lanka’s Hasitha Wijesundara, and representatives from participating Ministries, institutions and SME sector. The pioneering national Survey covered 20 Ministries that serve the business sector with over 90 of their Departments, authorities and councils established under them. The legal review of the study includes laws and regulations applicable to SMEs in no less than 15 aspects.

Addressing the event Minister Bathiudeen stressed: “There are more than one million registered SMEs in Sri Lanka providing employment to three million. When we take the unregistered SMEs the numbers will be much more. 52% of our GDP is driven by this sector with more than 40 percent of employment. Also More than 70 percent of enterprises are SMEs and in 2013 20% of exports came from SMEs. Given the importance of SMEs in our economy we worked on the National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka and recently concluded first UNESCO-APEID event in Sri Lanka which was a the first in South Asia. All these initiatives -including today’s assessment study -serve the reform vision of Unity government to link our SMEs to global markets.”

Among the key recommendations of the study are an apex SME Advisory Commission for the country bringing the three top institutions active in entrepreneurship (NEDA, IDB and SED-Small Enterprise Development) under one umbrella that would transform to Sri Lanka SME Authority –the apex SME body for national level coordination of the critical sector in economy-the SMEs. The study also recommends an SME Industrial Zone, an e-platform to manage SME market supplies, and a one stop licensing agency similar to BoI for all SME licensing needs.

Ministry of Industry and Commerce KDN Ranjith Ashoka said that SMEs are key component of economy even in developed markets. “These enterprises are more than 90% of all business enterprises in countries Japan, Sweden and Singapore. Even in SAARC countries such as India and Pakistan, they are at same levels.” Additional Secretary MA Thajudeen said: “The National Policy Framework for SME Sector Development -the pioneering SME policy in Sri Lanka- is now on the web at It is not a document set in stone but is subjected to revision every once in three years. We call for your active participation in developing it further.”

The Study report presented on 22 October was not a final report but is now expected to be further strengthened with inputs and opinions from stakeholders present at October 22 session. When finalised, the recommendations from this pioneering study are expected shape the long awaited way forward vision for Sri Lanka’s SME and entrepreneur domains, that the government is keen to position for export markets.

(Media Release – Ministry of Industry & Commerce)


Minister of Industry and Commerce Rishad Bathiudeen (fourth from left) joined by Ministry of Industry and Commerce Secretary KDN Ranjith Ashoka (third from right), Additional Secretary to the Ministry M.A. Thajudeen (third from left), Chairman Director General of NEDA Dakshitha Bogollagma (far left), E&Y Senior Partner Arjuna Herath (far right), and GIZ Sri Lanka’s Hasitha Wijesundara (second from right)

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