CA Sri Lanka focuses on enhancing financial structure of SMEsMarch 6, 2014, 7:45 pm
In its capacity as the country’s sole authority in promulgating accounting and auditing standards, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) has embarked on a fresh mission which aims at enhancing the financial structure of over 30,000 Small and Medium Enterprises (SMEs) across the country, which plays a significant role as the backbone of Sri Lanka’s fast developing economy.
Addressing a round table discussion in Colombo recently which fo used on the recent exposure draft of 0the International Financial Reporting Standard (IFRS) for SMEs, CA Sri Lanka’s President, Arjuna Herath disclosed that access to finance is one of the biggest challenges SMEs face, and due to this, they have difficulty to sustaining the business resulting in more than 40% of SMEs ceasing to exist within ten years of operation.
Of the 30,000 registered SMEs in the country, approximately 75%are based outside the Western Province, with rural SMEs contributing as much as 12% to the country’s Gross Domestic Product (GDP), of which 78% is for agricultural GDP, apart from providing 36% of industrial employment.
"Despite such importance to the economy, SMEs face many constraints, of which lack of finance is the strongest," Herath noted, adding that CA Sri Lanka is taking all necessary steps to play an active role to help SMEs overcome this significant issue they face.
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