A micro, small and medium enterprise (MSME) policy will be legislated to help the small and medium enterprises, which contribute most towards the economy.
“Our government is keen to partner the growth of micro, small and medium enterprises,” Finance Minister Ravi Karunanayake said. He said that an advisory committee will be set up to create recommendations for the future MSME policy of
Karunanayake said that a Rs.500 million MSME Credit Guarantee Scheme will be set up next year, under which 75 percent of a loan extended will be Treasury guaranteed.He noted that since local commercial banks are risk averse, foreign development banks such the Asian Development Bank (ADB) have come forward to support MSMEs.
“We have also been successful in obtaining a credit line of US $ 100 million from the ADB to support MSME lending at concessional rates,” he said. He said that an equity funding-oriented venture capital fund will be set up in April 2016 with funds contributed from banks, insurance companies, state-owned funds such as the Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF) and foreign funds, while the MSMEs benefitting from such venture capital will have their corporate taxes halved.
He added that the fund will also provide advisory services and IT support.Karunanayake also proposed to construct mini-industrial parks with MSME incubators in Moneragala, Puttalam, Jaffna, Vanni and Ampara. “I encourage the private sector also to join in this endeavour. In order to promote such investment in designated areas, the applicable tax rate will be reduced by 50 percent for a period of three years from the year in which the profit is generated,” he saidHe added that the government will also allocate Rs.150 million for the project. Karunanayake said that the government will place greater importance on some sectors, such as furniture, IT, dairy, horticulture, floriculture, food, fruit and vegetables, inland fishing, beauty culture and ornamental fish.