Enterprise banking to help SME enterprises

by Lalin Fernandopulle

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The Lankaputhra Development Bank will focus on enterprise banking by assisting small and medium scale entrepreneurs to absorb credit facilities in a productive manner, said the new Chairman Lankaputhra Development Bank, Sarath De Silva.

de Silva who took over duties on Tuesday told the Sunday Observer that most development banks have lost focus in supporting the SME sector due to commercial banking. The small and medium scale entrepreneurs are the backbone of the country's economy and the contribution to development cannot be undermined.

"Our mission is to be the core development bank in the country. The primary objective for the merger between the SME Bank and Lankaputhra Development Bank is to mobilise resources to strengthen the SME sector", he said.

Accessibility to funds and the capacity to absorb credit facilities are the primary concerns of the bank. The ability to repay loans is not the sole criteria in micro financing. Banks oriented towards SME development should provide consultancy, training and develop the infrastructure.

In response to the alarming inflation growth, he said agriculture, fisheries, gem and jewellery, animal husbandry, handicraft, leather products and cottage industry are some of the important sectors that the bank has been supporting.

de Silva said that the bank had performed well over the years as the premier SME development bank in the country. We want to make the people realise that the Lankaputhra Development Bank is not only concerned about lending loans but also ensure that the growth of enterprises is sustained.

"We are not a collateral based bank but a project oriented bank. Banks seek collateral when the risk is high in lending. Our concern is the development of enterprises", he said.

The bank will support infrastructure, fisheries, tourism and agro-based activities in the Eastern province with the Ministry of Nation Building.

With regard to the integrity and independence of the bank, the new Chairman said that the bank will adhere to the highest standards, integrity and performance. "Political appointments in State banks does not mean that the management should be subservient to politicians. Government institutions have to implement the policies of the government as long as the decisions do not affect the bottom line", Silva said.

Prior to assuming duties as the Chairman of Lankaputhra Development Bank, de Silva served the Bank of Ceylon for 37 years and was the General Manager for two years.