Budget-2018 would create a credit scheme with the allocation of Rs. 15 billion to enable small businesses to obtain loans at an interest of 6.5% and in some cases 3.3% to fund modernisation and expansion of enterprises, said Minister of Finance and Mass Media Mangala Samara.
The Minister, addressing a post budget forum in Colombo, said that at present one of the biggest barriers to starting a business was the cost of capital. Many young entrepreneurs and SMEs had innovative business ideas but found it difficult to implement at the prevailing interest rates of 15% and above.
Samaraweera said that in parallel, a SME guarantee fund was also being set up to enable SMEs with sound business plans to access credit without collateral. A Development Bank with an Exim window would provide development capital in the form of long term loans, project lending, and start up financing.
“These new initiatives will change the entire landscape of Sri Lankan enterprise,” said the Finance Minister
Referring to various suggestions made by different sectors of the economy on the budget, the Finance Minister said that he was willing to listen to suggestions where there might be mistakes to correct. But, the main theme of the budget- enterprise Sri Lanka and liberalisations were non-negotiable, he added.
The minister emphasised that citizens, especially the youth of the country would be empowered so that they would be responsible for their future. “Starting with this budget, we want to remove the barriers to investment, trade, and enterprise. Lack of access to land, labour, and affordable capital are the major impediments to the creation of new businesses and to expand existing ones.”