By Eranda Roshan Fernando
Not a single week goes by without seeing an article in mainstream media either highlighting the importance of SME or pointing out the policy level changes that are required to build a conducive environment for SMEs in Sri Lanka. However converting the policy discourse into action is the challenge. During the past few decades, numerous donor-funded programs have been implemented and some are ongoing focusing on the SME sector. Conversely, SMEs point out that they are experiencing enormous challenges not only to expand their businesses but also just for survival.
Recently, the Central Bank Governor was quoted as saying: “We have had many, many initiatives over the years. We have lots of institutions, but we need to coordinate and have a concentrated effort in four areas. Training, inputs including technology, access to finance, but for me, the most important is access to markets. We have put effort into production, training, and finance, but we haven’t done enough for market. If we crack that problem, we will have a much more successful SME sector in this country.” (http://www.ft.lk/news/SMEs-critical-for-growth--CB-chief/56-668131). Various research reports also have indicated access to the markets is one of the pressing issues experienced by the SME sector.
SME privilege card by CH17
CH17 Ltd. that has reputed track record in creating loyalty platforms for different segments such as apparel, travel and various other service sectors, has initiated an ambitious new program which will take the SME sector to the ‘Digital Era’ whereby entrepreneurs could experience the next generation business solutions coupled with a wide range of privileges and facilities. The interesting feature is that this new initiative addresses the challenge of access to markets for SMEs which is the more prominent issues as mentioned above.
CH17 has partnered with national chambers of commerce as well as district chambers of commerce in Sri Lanka to introduce this initiative to the SME sector. Any SME owner or in case of limited liability company, member of board of directors can apply for this SME Privilege card. Diagram 1 illustrates how the CH17 loyalty platform operated and generated the benefits for SMEs.
Benefits for the SME sector
The aforesaid ‘SME privilege card’ paves the way for B2B/B2C privileges on a single platform. This program is based on the premise that establishment of a close group of entrepreneurs can complement or support each other in selling/buying their respective products, to: (a) lower the cost of production (b) improve sales (c) build a rapport among them, etc. It also provides a platform to showcase the products on offer to customers who are registered with CH17 Loyalty, through a mobile app which can be downloadable in any android phone. As an inherent feature, loyalty platform cardholders are entitled to purchase goods and services at discounted rate from registered merchants.
New applicants (SMEs) can register as merchants, if they can meet the selection criteria and thus getting opportunity to build their own loyalty network. Accordingly, the CH17’s SME privilege card builds a curated marketplace for SMEs that will enable the businesses to promote their product and services. Can this initiative be the solution that SMEs were looking for? Only time will answer. After all no loss to anyone, but worth a try.
Another key aspect of the SME privilege card is that it facilitates the dissemination of information among businesses, particularly market information. In an era of knowledge-based economy, availability of information is one of the key factors for the success of business. Due to the limited access to market information, SMEs are compelled to depend on speculations which is an obstacle for the growth of SME sector.
As mentioned above, a mobile app has already been developed that enables the exchange of business information among card holders. CH 17 now is in the process of improving the app to facilitate the dissemination of market information. For example the app can be utilised to disseminate market information of wholesale market in Pettah or regional market such as Dambulla among members (card holders), so that the SMEs can easily know about market fluctuations.
We are yet to see a comprehensive database on SMEs in Sri Lanka. However, this new initiative is going to address that issue as well, because the CH17 is creating a database of member SMEs. Accordingly, any SME that obtains the SME privilege card will be added to the database.
(The writer is an economic policy researcher with some experience in implementation of SME development projects funded by international donor organisations. He can be contacted via email@example.com.)