One of Sri Lanka’s leasing business personalities, Gowri Rajan, an entrepreneur from the hill capital who is the Director of the Sun Match Company which manufactures Soorya and Sun Aqua mineral water, voiced that Sri Lanka must have a “women entrepreneurship policy” while commending the SME policy which came into being after years of deliberation.
Rajan was addressing the Asia Pacific Executives Forum 2017 on the challenges of women entrepreneurship in Sri Lanka. The event was held at the Hilton Colombo.
Whilst the SME sector makes up almost 52% of the Sri Lankan economy of $ 87 billion, 73% of the export sector comprises SMEs, amounting to an $ 11 billion performance for the country which underscores the importance of this sector which rarely gets highlighted in the media nor has preference to finance, she stated. The current estimate is that almost 35% of SMEs are made up of women and having a policy for women entrepreneurs will make this sector stronger, especially in the north and east of the country, said Rajan, who is also the First Lady Rotary Governor in Sri Lanka and a business personality who has received a 2017 WIM/IFC Outstanding Career Women Award.
The speaker went on to state that SMEs tend to prioritise employing women and the youth, given their flexibility to work in entrepreneurial work situations, especially in developing countries where one in three SMEs are owned by women though the figure is reportedly less in South Asia.
In Sri Lanka the number is about 22% and 39% in the case of small and medium-scale enterprises which Rajan said justified her call for a national policy for women entrepreneurs.
Offering the family company Sun Match as an example, she highlighted how selling abroad involves various costs ranging from marketing to launching new products and packaging to meet the needs of the global consumer which demands additional costs and requires credit. Lending to SMEs that are led by women entrepreneurs suffers from informational problems and the inability to provide collateral/guarantees and credit history means that they incur higher interest rates and fees compared to larger firms which must be addressed, said Rajan. This problem is compounded by the difficulty to access affordable trade finance and a lack of dedicated financial services for the trading sector, which further reduces their export potential, said the entrepreneur.