The lack of availability of BDSproviders in Sri Lanka was reportedas a top constraint by SMEs. The lackof access to business developmentservices limited business operationsin over 40 per cent of SMEs thatparticipated in the survey conductedby the IPS-NCCSL (Figure 8).As a second-best solution, business/trade associations, chambers ofcommerce and federations ofindustries, can help SMEs work withbanks to resolve financial andoperational concerns that are holdingloan approvals back. Meanwhile,banks themselves may want toengage in some BDS activities aswell. For instance, the newlyestablished SME Banking Centres ofPeople's Bank attempts to doprecisely this.In providing BDS, BDS providers aswell as banks and financialinstitutions should consider thefollowing elements:(a) improve management andoperational systems to enhancetransparency and governance(b) address gaps in bookkeeping/accounting(c) assist SMEs to developbankable business expansionplansThe lack ofaccess tobusinessdevelopmentservices limitedbusinessoperations inover 40 per centof SMEs thatparticipated inthe survey.Lack of BDS top constraintLack of BDS a constraint% of respondentsAgricultureManufacturingServices
Banking on SME Growth: Improve Access to Finance in Sri Lanka23(d) guide SMEs on financial,taxation and other regulatorycompliance matters.If the government is keen onembarking on programmes to boostBDS provision, a useful model to lookat is the EMPRETEC capacitybuilding programme established byUNCTAD. EMPRETEC - the Spanishacronym for emprendedores(entrepreneurs) and tecnología(technology) - addresses thebusiness development requirementsof SMEs with the aim of making themglobally competitive. The entre-preneurship training workshopsconducted under the programmehave helped SMEs improve theircreditworthiness and attractiveness topotential investors from venturecapital funds and financialinstitutions. Meanwhile, a UNDPprogramme modelled on similar linescalled Enterprise Africa, encouragesthe large private sector companies,banks and consulting firms, tosupport BDS provision for SMEsthrough training and post-trainingprogrammes and services. A keyfeature of this programme is theprovision of support and capacity-building services, and assumesresponsibility for loan referral andmonitoring - thus reducing transactioncosts for partner financial institutionsand improving SMEs' chances ofsecuring access to finance (UNCTAD,2001). Additionally, the governmentcan embed BDS provision in currentgovernment departments as well. Forinstance, by installing an SME deskat Provincial Inland RevenueDepartments, Central Bank RegionalOffices and Industrial DevelopmentBoard branches, SMEs can gainspecialised advice on regulatory andother matters relating to governmentservices.