Catalyzing Small and Medium-sized Enterprise Venture Capital in Sri Lanka | Asian Development Bank

Catalyzing Small and Medium-sized Enterprise Venture Capital in Sri Lanka

Publication | March 2018
Catalyzing Small and Medium-sized Enterprise Venture Capital in Sri Lanka

The ability of small and medium-sized enterprises (SMEs) to establish themselves and scale their operations is integral to Sri Lanka achieving equitable economic growth. Access of SMEs to equity or risk capital has to be improved.

Small and medium-sized enterprises (SMEs) are the bedrock of Sri Lanka’s economy. Comprising 75% of all active enterprises, Sri Lanka’s SMEs provide 45% of employment and contribute 52% to its gross domestic product. Creating an environment conducive to SME growth is integral to achieving equitable economic growth in Sri Lanka. Against this backdrop, this paper seeks to evaluate the viability of supporting the SME sector by improving access to equity or risk capital. This paper highlights market assessment of SMEs and SME finance in Sri Lanka currently, presents documentation of international precedents, and provides an analysis of fund structuring considerations. It presents recommendation for a government-initiated venture capital fund for SMEs in Sri Lanka.

Contents 

  • Executive Summary
  • Small and Medium-sized Enterprises Market Assessment
  • International Precedents in Small and Medium-sized Enterprises and Small and Medium-sized Enterprise Venture Financing
  • Fund Design Considerations
  • Concluding Recommendations
  • Appendixes