COSMI welcomes Govt’s SME revival efforts | Sunday Observer

COSMI welcomes Govt’s SME revival efforts

26 January, 2020

The Confederation of Micro, Small and Medium Industries (COSMI) states that the landmark loan moratorium for SMEs offered by the government in December last year is on track to revive SMEs but the stipulated reporting deadline is ‘too tight’.

“We praise the government for its determined action to revive domestic SMEs by suspending recovery of loans obtained by the sector,” said Founder President COSMI Nawaz Rajabdeen.

“However, there is a catch - the deadline for submitting business plans and reports to banks to obtain the rebate is January 31. These documents are comprehensive and most Sri Lankan SMEs are simply not capable of completing them by the deadline. Many SMEs reached out to us to call for an extension from the government,” he said.

“We call on the government which positively works to revive SMEs to extend this deadline to a more reasonable date. A new, feasible and a practical deadline will make this landmark SME revival effort meaningful for the government and the recipients,” Rajabdeen said.

Earlier, the Treasury in a media release stated, “The recently announced tax reform initiatives provide substantial savings to all banks, including the Central Bank of Sri Lanka. The Government expects the banks to use part of such savings to revive the SME sector on a priority basis.”

Financing and lack of credit are the bane of SMEs. According to the 2018 Ernst and Young (EY) SME Survey commissioned by the Ministry of Industry and Commerce, ‘Access to Finance’ was the foremost issue faced by SMEs in doing business. 59% of the respondents in the Ernst and Young Survey said the SMEs were hampered by finances. “…the effective interest rates charged by banks (13%-17%) and non-bank financial institutions (30%-50%) are high and burdensome for SMEs,” the report stated. The Confederation of Micro, Small and Medium Industries (COSMI) was formed last year and aims to revive and foster the SME and industry sectors. 

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