The lack of availability of BDS providers in Sri Lanka was reported as a top

The lack of availability of bds providers in sri

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The lack of availability of BDS providers in Sri Lanka was reported as a top constraint by SMEs. The lack of access to business development services limited business operations in over 40 per cent of SMEs that participated in the survey conducted by the IPS-NCCSL (Figure 8). As a second-best solution, business/ trade associations, chambers of commerce and federations of industries, can help SMEs work with banks to resolve financial and operational concerns that are holding loan approvals back. Meanwhile, banks themselves may want to engage in some BDS activities as well. For instance, the newly established SME Banking Centres of People's Bank attempts to do precisely this. In providing BDS, BDS providers as well as banks and financial institutions should consider the following elements: (a) improve management and operational systems to enhance transparency and governance (b) address gaps in bookkeeping/ accounting (c) assist SMEs to develop bankable business expansion plans The lack of access to business development services limited business operations in over 40 per cent of SMEs that participated in the survey. Lack of BDS top constraint Lack of BDS a constraint % of respondents Agriculture Manufacturing Services
Banking on SME Growth: Improve Access to Finance in Sri Lanka 23 (d) guide SMEs on financial, taxation and other regulatory compliance matters. If the government is keen on embarking on programmes to boost BDS provision, a useful model to look at is the EMPRETEC capacity building programme established by UNCTAD. EMPRETEC - the Spanish acronym for emprendedores (entrepreneurs) and tecnología (technology) - addresses the business development requirements of SMEs with the aim of making them globally competitive. The entre- preneurship training workshops conducted under the programme have helped SMEs improve their creditworthiness and attractiveness to potential investors from venture capital funds and financial institutions. Meanwhile, a UNDP programme modelled on similar lines called Enterprise Africa, encourages the large private sector companies, banks and consulting firms, to support BDS provision for SMEs through training and post-training programmes and services. A key feature of this programme is the provision of support and capacity- building services, and assumes responsibility for loan referral and monitoring - thus reducing transaction costs for partner financial institutions and improving SMEs' chances of securing access to finance (UNCTAD, 2001). Additionally, the government can embed BDS provision in current government departments as well. For instance, by installing an SME desk at Provincial Inland Revenue Departments, Central Bank Regional Offices and Industrial Development Board branches, SMEs can gain specialised advice on regulatory and other matters relating to government services.

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