BOC recognises strategic value of SMEs

Wijayantha Rangajeewa who developed his business from a small scale enterprise to reach 600-800 crates of ornamental fish a month to destinations around the world including the USA, Europe Australia and the Middle East, and providing employment to nearly 5,000 families, attributes his success to the dedication and commitment of the Bank of Ceylon’s (BOC) SME services.

In 1989, Nimal Jayasuriya obtained a loan from the BOC’s SME services sector to help realise his dream of financial freedom. Today his company exports 14 varieties of canned and vacuum packed food items across the globe and Jayasuriya won Entrepreneur of the Year and NCE Awards several times.

As one of the pioneers in the introduction of SME financial assistance services to its portfolio over three decades ago, the BOC has been the driving force behind countless such success stories.

The SME sector has long played a pivotal role in Sri Lanka’s economy. With over 80% of the registered businesses in the country belonging to this sector and collectively contributing over 50% to the GDP and account for 35% of Sri Lanka’s employment, the SME sector has been identified as a Millennium Development Goal and a significant driver of the country’s economic development and progress.

The BOC was among the first financial institutions to recognise the strategic value of this sector and play an active role in encouraging and assisting in its growth.

The Bank offers a range of lending lines for the SME sector, with these services today forming a sizeable portion of its lending portfolio.

The BOC provides SME loans in all economic sectors, including agriculture, fishing, garments, animal husbandry, plantations, dairy, factory upgrades, tourism related industries, infrastructure development and education.

SMEs which are not traditionally considered mainstream industries, such as beauty culture, bakeries, furniture manufacture, and handicrafts also receive consideration in the form of special interest rates and other concessions to encourage economic development in a wide variety of spheres. The other sectors which the BOC with the Government champions is female empowerment and youth entrepreneurship.

The Bank has taken steps to increase access to concessionary finance and provide entrepreneurial skills training enabling women to achieve self-sufficiency and independence.

Youth entrepreneurs are also encouraged to reach for their goals through BOC’s assistance.

Recognising the challenges faced by SME entrepreneurs, the Bank rather than insisting on complete collateral cover for a loan, considers factors such as the financial viability of the proposal, its potential contribution to GDP and employment.

When approved, Bank officers work with the entrepreneur to craft a suitable flexible financial plan.

All projects funded by the Bank should adhere to Government environmental regulations and obtain relevant licenses. BOCs SME portfolio has grown rapidly in conjunction with the Bank’s growth, with increasing deposit bases achieved through attractive interest rates being channelled to develop the SME services portfolio.

The success of this two-pronged approach is reflected in the significant increase in the Bank’s deposit base, growing 11% from 2010 to 2015.

The BOC conducts several entrepreneurial skills development programs countrywide, which ensure that aspiring entrepreneurs are provided not only finances, but also the skills to ensure their projects succeed. These Entrepreneur Capacity Building Programs offer invaluable advice in areas such as labour laws, tax regulations, environmental concerns, financial analysis, working capital and cash flow management, effective customer service and a plethora of other vital business skills.