Entrepreneurs with breakthrough business ideas gaining the advantage

By Sanath Nanayakkara

The financial support from The Asian Development Bank (ADB) has galvanized a number of adventurous small and medium enterprises (SMEs) in Sri Lanka to take their business to the next level.

The financial media was last week presented with a precious opportunity by the ADB to visit and see how the Bank is supporting this important strategic segment, zooming in on its projects in Kandy – the central highlands of Sri Lanka, where the regional entrepreneurial spirit is being nurtured with the right level of support at the ground level, through local banks that are working in tandem with ADB.

SMEs’ operational environment deteriorated due to the prolonged COVID-19 pandemic and the ongoing economic crisis in the country. During this time, small businesses faced high inflation and high interest rates. Reduced aggregate demand from customers lowered SMEs’ profitability, creating significant uncertainty in the economic outlook. Women-owned SMEs or microenterprises suffered disproportionately because of their lack of resources, knowledge and bargaining power during times of crisis.

ADB has primarily been supporting MSMEs’ access to finance through (i) SME Line of Credit Project since 2016 amounting to approximately USD 350 million and (ii) Strengthening the Regional Development Bank Project (SRDB project) amounting to USD 50 million in 2019.

Under the SME line of credit project, ADB funds were provided for working capital loans to support the immediate funding requirements of SMEs in improving access to finance through a blended grant with ADB’s SME line of credit to help develop a robust ecosystem for SMEs.

The following are some excerpts from the interviews The Island had during the above mentioned tour with entrepreneurs who are beneficiaries of ADB funding.

Properly cured vanilla with pleasant aroma

Chamini Dinusha, Owner, Aqua Ceylon International Pvt Ltd said:

“I am an entrepreneur engaged in the business of supplying ornamental fish to the export market. I received a loan from ADB of Rs. 4.275 million and a grant of Rs. 0.475 million. I was going through a big struggle as I didn’t have the funds to build storage tanks to keep the fish under proper quarantine conditions. I used the loan amount that I got from the ADB to complete the construction of 170 cement tanks for storing the ornamental fish in my premises. Earlier, we used to store our fish in polyethene bags, and we always remained nervous about the wellbeing of our fish bound for far-away overseas markets such as the UK. Today, we are not only relieved from that stress, but also are confident that we can deliver the ornamental fish in good health condition to the end buyer whether it be UK or USA. Further, as our storage capacity has increased, we can meet larger orders which was not possible before the ADB loan. We are ready for any size- order or any shipment now.”

M.B. Madugalla, Owner, Lak Vanilla Products said:

I have been in the business of collecting and curing vanilla beans for 23 years. Curing a quality vanilla bean is an arduous process which takes a couple of months, but it is an expensive ingredient in the food world. We used the ADB loan of Rs.3.3 million to purchase about 5,500 kilos of vanilla bean. A properly cured kilo of vanilla bean fetches Rs. 45,000-50,000 in the food processing market while a kilo of raw bean is purchased from the farmers at Rs. 4,000. We sell our products to main ice cream and confectionery brands in the country. The ADB loan has helped us to pay our suppliers upfront and keep a larger stock with us to supply to the market at any time. So, we don’t lose business anymore.”

Asanka Ariyadasa, General Manager, Trinity Apparel said:

“We started in 1998. We are specialized in women’s wear and are fully focused on the local market. We supply products to No Limit, Fashion Bug, Thilakawardena, Sriyani Dress Point etc. We manufacture about 100,000 finished apparel pieces a month. We received a loan of Rs.35 million from ADB in 2023 which we invested in increasing our power generation capacity. In Kandy, we experience frequent power fluctuations. With increased production, we wanted more power with more supply stability. The ADB loan came in handy in this context. We replaced our old 100 KVA generator with a 200 KVA unit, and today we are carrying out our operations without any power issue. This has made a great positive impact on our business.”

Sagara Liyanage, Owner, Earth Bound Creations said:

“I manufacture creative handicrafts from newspapers destined to be disposed of without any use. Using these newspapers, I make baskets, bowls, bins, pencils, lampshades etc. These products are in high demand by overseas buyers not only for their aesthetic value, but also for the green environmental concept embedded in it. I received Rs. 10 million working capital loan from ADB. I utilized the funds to tide over the shortage of newspapers during the Covid-19 pandemic period and stocked the purchase for the production boost in the post-Covid period. As Sri Lanka had run out of newsprint at the time, I even had to import it. The ADB loan kept me resilient in terms of having lasting stocks for the higher production demand that followed.”

Sandya Wimalasuriya, Owner, Chamindu Pooja Bhanda Products said:

“I started off by manufacturing decorative umbrellas designed for use at the temples, Today, I manufacture rain umbrellas and raincoats as well. Our umbrella production is about 50,000 per month. My products are supplied to the leading umbrella brands in Sri Lanka. The 4.8 million loan plus grant that I received from the ADB was used to upgrade the machinery in my factory and transform the manufacturing into more efficient mechanized form from excessive manual labour. Now I am planning for a new expansion drive targeting Rs. 1 million net profit per month.”