Gemidiriya People's companies a boon to SMEs

by Gamini Warushamana

The Mudunkotuwa West Gemidiriya People's Company in Kiriella, Ratnapura has secured a deal to supply brush handles to Ravi Brush (Pvt) Ltd, a Hayleys Group company.

The sub contract was secured by Gemidiriya under the business linkage program. Despite many SMI initiatives most of them end in failure as the products fail in the market. SMEs have to compete with mainly low cost imports of products in almost every industry.

Therefore Gemidiriya is concerned over the market aspects of the products when we start SMEs and in this instance Ravi Brush (Pvt) Ltd has agreed to purchase the entire production, said the Communication Officer of Gemidiriya Community Development and Livelihood Improvement Project Ashoka Herath.

Twelve members of the Mudunkotuwa West Gemidiriya People's company obtained Village Savings and Credit Organisation (VSCO) loan of Rs. 30,000 each and the balance Rs. 65,000 was invested by the People's company to obtain four machines needed to manufacture the brush handles. The money from the People's Company comes in the form of shares for the project.

VSCO is the micro financing fund of the Gemidiriya People's Company and it receives funds from compulsory savings of the members (Re. 1 per day), normal savings, loan interest and World Bank funds. VSCOs provide the capital needed by the people to start businesses after evaluating their proposals.

A house in the vicinity was rented to fix the machines and start the workshop. The twelve-member group has been given an in-house training by Ravi Brushes. The company supplys treated rubber planks, the raw material for the industry on credit.

The members work in shifts and can manufacture any quantity of handles as there is no restriction by Ravi Brushes who are willing to purchase any amount.

Finance and survival of the SMEs are the two main problems faced by entrepreneurs and the Gemidiriya People's companies successfully overcome these two issues with a strong micro finance fund and business linkage programs, Herath said.

The production process was started recently by the group with encouragement of the Management of Ravi Brush company and Gemidiriya officials.

With the start of the new industry new business opportunities are emerging. Another small group is carrying out, a feasibility study on how to treat rubber wood and supply it to the People's Company as raw material as rubber wood is freely available in the area.

Herath said that the capital needed for any viable business is easily available in the village through VSCO.

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