Small and medium enterprises are collapsing – Tania Abeysundara
Joining ‘Sirasa’ journalist Ashoka Dias in a ‘Pathikada’ programme recently, Tania Abeysundara, Chairman of Sri Lanka United National Businesses Alliance (SLUNBA), said that small and medium entrepreneurs were in a desperate situation and like a drowning person hanging from a tree, the small and medium entrepreneur has reached a position where they hold tightly to anything they can get their hands on and wait to come out of the dire situation.
Commenting on the government’s recent claim that bank interest will be reduced as a relief to small and medium enterprises, she stated that it is like telling fairy tales to little children to put them to sleep.
She points out that to provide such a situation, the government should reduce the rate of treasury bill purchases. Until that happens, it is only a dream to provide relief to the entrepreneurs by reducing the government’s bank interest. She emphasizes that the rate of buying treasury bills in 2018 was 8.33%, 9.5% in 2019 and 7% in 2020 during the coronavirus and in 2021, the rate of purchasing treasury bills decreased to 4 per cent. She also pointed out that the entrepreneurs got a lot of concessions, credit schemes etc., to run their businesses because the rate of buying treasury bills was reduced to 4 percent and less.
But later, in 2022, it remained up to 8.2% and in April 2022, when the Governor of the Central Bank of Sri Lanka announced that Sri Lanka was bankrupt, the rate of buying treasury bills rose from 8.26% to 12.5%, she pointed out. After that, the rate of purchasing treasury bills increased to 23% in May, 22%, 23%, 27% and 33% in June, she pointed out. She also noted that 26% to 27% was paid for bank deposits then.
She also pointed out that the entrepreneurs had to pay 37% interest at the time when they essentially had to take out an OD loan. She also says that OD loans had to be taken at 42% interest to pay employees’ salaries. She says that 13 multinational companies doing business in this country are not aware of this but small and medium entrepreneurs are feeling the pressure.
Tania Abeysundara pointed out that small and medium-scale entrepreneurs who produce for the local consumer have been dealt a huge blow with the increase in electricity and water bill fees, the need to pay high bank interest and the increase in taxes at an unbearable level.
She pointed out that there were about one million small and medium entrepreneurs in the country, and now it has come down to 300,000 to 400,000. She pointed out that enterprises such as the hospitality service supply and construction sectors were under the most pressure and now the garment sector is rapidly collapsing.