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Bank Finance For Small And Medium-Sized Enterprises In Sri Lanka: Issues And Policy Reforms

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  • GAMAGE Pandula

    (College of Business, Victoria University, Melbourne, Australia)

Abstract

Access to bank finance is necessary to create an economic environment that enables Small and Medium-sized enterprises (SMEs) to grow and prosper. The SMEs in Sri Lanka, however, face significant constraints to access bank finance. The purpose of this paper is to investigate the access to bank finance and related issues in the SME sector of Sri Lanka. The paper is exploratory in nature and reviews the bank financing situation for SMEs in Sri Lanka, as well as provides an overview of constraints faced by the banks (supply-side) and SMEs (demand-side). The paper also highlights some good practices in SME lending from international experience and outlines some recommendations to help overcome the constraints faced by the banks and SMEs. The recommendations discussed in this paper may be of importance to policymakers, not only in Sri Lanka, but in many other developing countries in a similar stage of economic growth.

Suggested Citation

  • GAMAGE Pandula, 2015. "Bank Finance For Small And Medium-Sized Enterprises In Sri Lanka: Issues And Policy Reforms," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(2), pages 32-43, August.
    • Handle: RePEc:blg:journl:v:10:y:2015:i:2:p:32-43
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    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/1023gamage.pdf
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    References listed on IDEAS

    as
    1. David Mushinski, 1999. "An analysis of offer functions of banks and credit unions in Guatemala," Journal of Development Studies, Taylor & Francis Journals, vol. 36(2), pages 88-112.
    2. Kiatchai Sophastienphong & Anoma Kulathunga, 2010. "Getting Finance in South Asia 2010," World Bank Publications - Books, The World Bank Group, number 2498, December.
    3. Aldaba, Rafaelita M., 2012. "Small and Medium Enterprises` (SMEs) Access to Finance: Philippines," Discussion Papers DP 2012-05, Philippine Institute for Development Studies.
    4. Jane S. Pollard, 2003. "Small firm finance and economic geography," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 429-452, October.
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    Cited by:

    1. Vincent MASAKA, 2022. "Challenges Being Faced by Small and Medium Enterprises in Accessing Credit Facilities in Lusaka Province, Zambia," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 3(5), pages 49-61, May.

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