IFC, SLID use EU support to help small enterprises improve business practices
Friday, 8 May 2015 00:00
Participants at the workshop are introduced to IFC’s Corporate Governance Assessment ToolFrom left: The Sri Lanka Institute of Directors CEO Lilani Perera, Jetwing Travels Managing Director Shiromal Cooray and IFC Country Manager for Sri Lanka and the Maldives Adam Sack at the training program in Batticaloa
IFC, a member of the World Bank Group, has partnered with the Sri Lanka Institute of Directors (SLID) to promote improved corporate and ethical business practices for small businesses in Eastern Sri Lanka. The initiative is part of the European Union Support to District Development Programme (EU-SDDP), funded by the EU and implemented by five UN agencies and IFC.
As part of this initiative, a seminar was held recently for 50 small and medium-sized businesses in the Batticaloa District focusing on how small businesses could operate business better and more responsibly to spur their growth.
The seminar, organised by SLID and the Batticaloa District Chamber of Commerce, Industry and Agriculture, included presentations on the formation of a company, legal procedures of registering a company and finance, accounting and tax issues faced by small businesses.
“Comprehensive, custom-made training programs like these help entrepreneurs and small business owners improve their corporate governance to operate more efficiently, obtain access to capital and mitigate risk with safeguards against mismanagement,” said SLID Chief Executive Officer Lilani Perera.
Small businesses in emerging markets generally rely heavily on a few talented people—most often the founders, who dominate the decision-making process. The command-control system is common, strategic and operational decisions occur informally and there are very few written policies. If such companies are well governed, with sound corporate governance principles in place, they will usually outperform other companies and will be able to gain easier access different forms of financing helping fuel further growth.
Participants at the seminar were also introduced to the IFC Corporate Governance Assessment Tool, a customised tool to help small businesses assess their existing corporate governance practices, based on the universally accepted OECD principles.
“In addition to increasing access to capital for small businesses, improved corporate governance practices contribute to economic development,” said IFC Country Manager for Sri Lanka and Maldives, Adam Sack. “Increased access to capital encourages new investments, boosts economic growth and provides employment opportunities.”
Such projects form an integral part of the financial and development assistance that is provided through the EU-SDDP with a grand total of € 60 million to support the Government of Sri Lanka’s thrust for economic and social development in seven conflict-affected districts covering half a million people. The actions undertaken through this initiative are linked to three focus areas, including support to poverty reduction and provision of basic infrastructure and services for vulnerable populations, support to local economic development and the strengthening of local governance.