ECONOMYNEXT – Sri Lanka wants to help 25,000 women entrepreneurs get into distribution channels amid a Covid-19 pandemic State Minister for Finance Shehan Semasinghe said, while concerns were raised on regulatory and know-how barriers.
“We have allocated 1 billion rupees mainly targeting young 25,000 women entrepreneurs who will join the supply chain and if there is a pandemic situation which arises,” Semasinghe said in a virtual forum.
“We will be geared for an uninterrupted distribution channel across the country.”
The forum was organized by the European Union and Chrysalis, a Sri Lankan organization focused on empowering Women and Youth to contribute to the country’s growth.
According to the organization micro, small, and medium enterprises (MSMEs) contribute to 53 per cent of the country’s output and about 24 per cent of such entities are owned or led by women.
Minister Semasinghe who oversees Samurdhi, Household Economy, Micro Finance, Self-Employment and Business Development said 10 billion rupees have been allocated in the budget for 200,000 families receiving Samurdhi income supplement benefits to build ‘cluster villages’.
Another 1000 families who are categorized as disabled will also be part of the ministry’s empowerment project.
Minister Semasinghe said the finance ministry has allocated 73 billion rupees to activities that will benefit MSMEs.
Micro and Constraints
Achala Samaradivakara, Co-Founder, Good Market, an organization that sources organic, craft, rural and environmental products to sell in Colombo and online, said many businesses started by women in rural areas are not captured in official statistics.
She said it was very difficult to register a business in Sri Lanka.
“After working with so many women what I realized is that there are a lot of legal barriers for these women to register their businesses,” Samaradivakara said.
“The application process for getting a business registration is really hard.”
In Sri Lanka, big fees are charged by the company registry to incorporate a limited company, compared to some fast-growing nations, though annual fees are lower.
Meanwhile, Samaradivakara said there was a basic lack of know-how and quality control among small producers.
She said the people have resources especially in the rural areas but they do not know how to add value to their products, even drying fruits and vegetables.
“Even for me to start Good Market this was the biggest gap,” Samaradivakara said. “When we go to villages and ask them about dried fruits they don’t know.”
“When you come to the Good Market you can see a certain quality because from the beginning we worked with them to develop their quality to a certain market standard.”
She said the government could also help by supporting the setting up an information hub so that women entrepreneurs could network and connect.
She requested the minister to build a platform to develop networks with other entrepreneurs to connect them. She said co-operatives were a possibility.
“Even though there are a lot of accelerator programs happening we are not connected,” Samaradivakara said. “So building a network would also be easy to pass down information.”
“In Colombo, there are a lot of markets set up such as Good Market but at the village level that is not the case.
“We really need to think about going at regional or village level and making these producers to come out and sell their products even though they don’t need to come to Colombo.”
The minister said he would want to continue further discussions with the panellists to get a better idea of the MSMEs as they work more closely with the people at ground level than the ministry.
After Covid-19 she says there is renewed interest in decentralizing supply chains and selling locally.
“After COVID everyone is looking at decentralizing and business think about working closer to the neighbourhood so if we can build a system where these small producers could sell their goods to maybe a nearest co-operative it will be great.”
She also requested a certification locally, as there was only international certification.
“At the moment most of the certification focuses on international levels but I think it’s okay to have a domestic level certification at first for them to try it out,” she said.
However, observers say state certification will add more regulations to small businesses and perhaps trigger corruption and it is better to set up self-regulatory standards, such as Good Market A, B, C.
More standards that are enforced in developing countries which are now subject to politicization or are out of touch with the needs of customers such form barriers of costs such were originally developed by the community.
The star rating of hotels which are now considered out of touch with customer needs was originally developed by the Automobile Association of the US to help travellers but in the hands of the state they have become tools of oppression, some critics say.
Technology standards such as the GSM were also developed as industry initiatives.