Lanka enlists German support for rural entrepreneurs

Sri Lanka has enlisted German support for 18000 marginalised rural entrepreneurs in the country.The much-needed support is expected to improve standards of purchasing agents in remote regions who are the first point of product distribution for more than 1.4 million rural household 'economic units' across the country.

Minister of Industry and Commerce Rishad Bathiudeen (left), greets the GIZ team’s German Muller (Senior Advisor, GIZ Sri Lanka) as Dr. Liehr, Country Director of GIZ Sri Lanka (second from left) and Andrea Grimm (First Secretary, German Embassy in Colombo) look on.

Sri Lanka's National Enterprise Development Agency (NEDA) under the Ministry of Industries and Commerce has now been informed of prospective German support towards its regional entrepreneur uplifting initiative aimed at creating a bankable village entrepreneur.

"This is a powerful shot in the arm for 18000 marginalised entrepreneurs in geographically difficult regions in Sri Lanka.

The focus at present is mainly on micro and small scale entrepreneurs -the purchasing agents in rural areas - on whom our rural household producers largely depend on but who are marginalised from our banking infrastructure" said, Minister of Industry and Commerce Rishad Bathiudeen. Minister announced this in the aftermath of his successful discussions with Colombo's German Development Cooperation (GIZ, formerly GTZ) team held in Colombo. The GIZ team was led by Dr. Friedrich Liehr, Country Director of GIZ Sri Lanka.

The other members were Ms Andrea Grimm (First Secretary, German Embassy, Colombo) and German Muller (Senior Advisor, GIZ Sri Lanka). GIZ currently mandated to support the German Government's objectives in the field of international cooperation for sustainable development and is also engaged in international education work around the globe.

"We have now successfully enlisted support for current and future entrepreneurs in far regions of Sri Lanka" said Lakshman Wijeyawardena, Director of NEDA.

"The micro and small scale purchasing agents and entrepreneurs in difficult geographic areas such as Nuwara Eliya and Moneragala districts are playing a crucial role in the distribution but are on a continuous struggle to run their enterprises since banks do not accommodate them due to lack of collateral. We will also look into overcome this issue in addition to strengthening their capacity," Wijeyawardena said. "Our initial support target is 18000 rural entrepreneurs but we are ready to increase the numbers when more funds become available" Wijeyawardena said.

The micro and small scale vendors play a vital role in Sri Lanka's rural supply chains. The bulk of the household produce based on such government sponsored large scale programmes as Divi Neguma where one million rural household units are boosted, are often first purchased by these micro and small vendors, thereby these vendors becoming the rural economies' entryway to the supply chain.

If these entrepreneurs continue to struggle and collapse, then the village economies could find themselves off-grid. Realising the implications of such a scenario, Industry Ministry's NEDA bagan pushing to strengthen the rural micro and small vendor layer, and has now successfully enlisted German government support as part of its efforts.

According to the Ministry of Economic Development, 1,455,187 households (called as "home economic units") are taking part in its Divi Neguma program. 1,356,594 home garden units and 94,011 livestock farming units are already functioning under this program, according to the Ministry of Economic Development.

Among the backyard economic activities of Divi Neguma are agriculture, fisheries, livestock and small family enterprises.

The NEDA - GIZ collaboration, aimed at making regionally marginalised entrepreneurs bankable and bringing them to mainstream economic process, will initially investigate the viable micro and small businesses in rural areas followed by identification of geographic locality potentials.

Identification of potential entrepreneurs and training them on such aspects as book keeping and business planning will follow thereafter.

According to GIS Sri Lanka, the German Development Cooperation with Sri Lanka is geared towards a future oriented, sustainable development.

"This is an advanced project. We may support NEDA through Phase II of GTZ ProMIS Project" said Dr. Liehr, Country Director of GIZ Sri Lanka. German Muller (Senior Advisor, GIZ Sri Lanka) said: "Through this initiative we target to strengthen even the marginalised through microfinance.

We will support forming credit groups and help regionally marginalised entrepreneurs to access micro credit."

Two advisors to the Minister of Industry and Commerce, M. Vamadevan and Ms Himali Jinadasa were also present.