New book on major challenges for SMEs in Lanka and SAARC countries

The far-reaching contribution of SMEs in reducing unemployment, income inequality and poverty, and in promoting regional, national and sub-national economic development is perhaps nowhere true than in the SAARC countries still grappling with serious problems of poverty, unemployment and inequality.

Yet, SMEs in SAARC countries are confronted with severe impediments constraining their growth and competitiveness in an increasingly globalising economy.

The prevailing policy environment in most SAARC countries is not conducive to their growth and expansion and the realisation their full potential.

A new book titled Small and Medium Enterprise (SME) Development in SAARC Countries: Challenges and Policy Reforms edited by Wilbert Gooneratne and S. Hirashima and published by the Centre for Development Research (CDR), Colombo under the sponsorship of the Federation of Chambers of Commerce and Industry (FCCISL), Small and Medium Enterprise Developers (SMED) and Friedrich Naumann Stiftung (FNSt) sheds valuable insights on meeting the challenges faced by SMEs.

The book notes that these difficulties are aggravated due to small size and geographical isolation of most SMEs which prevent them from taking advantage of market opportunities, achieving economies of scale (in securing inputs, raw materials, finance, information, consulting services, and prevent internalisation of functions like training, logistics, technology and innovation due to high fixed costs.

Most rural SMEs are located away from urban centres, denying them numerous locational advantages that urban SMEs enjoy.