LDB an impetus to help SME development - President

by Lalin Fernandopulle

President Mahinda Rajapaksa said terrorism cannot overcome the country's development. If terrorism is an obstacle to develop the country we should first overcome it. The government is fully committed to eliminate terrorism that undermines the economic welfare and progress of the country.

Addressing the launch of the Lankaputhra Development Bank (LDB) on Tuesday the President emphasised the need for rural and infrastructure development. It is in this light that the LDB was launched to give an impetus and help the small and medium entrepreneur.

By extending a helping hand to the marginalised and poor entrepreneur the development bank is fulfilling a crucial responsibility towards the development of the country.

We cannot by any means neglect our farmer, fisherman or the ordinary labourer whose cry for assistance very often goes unheeded.

They are assets to the country and their contribution is immense, the President said.LDB Chairman A. de Vass Gunewardena said the LDB will play a vital role in achieving an economic growth rate of 8 percent in the next three years.

A 100 percent government funded development bank LDB is the brainchild of President Rajapaksa to provide a starting point for small and medium scale enterprises and assist the development of the rural sector.

The LDB will usher in a new era of development and entrepreneurship fulfilling financial requirements of over one million rupees in the country. The bank will provide financial assistance to develop agriculture, fisheries and other vital sectors that contribute to the growth of the national economy.

With an initial capital of Rs. 1,500 million from the government and private sector infrastructure Development Fund, LDB is relying on its interest rates on savings to generate additional funds. Moving away from traditional lending methods that emphasise on collateral to the extent of stifling initiative, LDB focuses instead on project assets and results, Gunewardena said. LDB is open to innovative ideas and has invited business plans from the public.

With competitive lending rates, extended involvement and expert advice from the public and private sectors the bank will be a driving force in achieving the development goals set out for the country by President Rajapaksa.

Treasury Secretary Dr. P. B. Jayasundera said, "We can be proud of the 7 percent GDP growth achieved during the first six months of 2006 and if we could maintain the growth rate the country is set to achieve 8 percent growth next year. While we have made great strides in achieving economic growth challenges such as achieving peace and improving infrastructure are essential if the country is to progress," he said.

The government has invested about US $700 million on SME development and initially five projects in 25 districts will be launched to increase production of local goods for export and accelerate export led growth, Dr. Jayasundera said.