The Exporting Problem of SMEs: Finance is one solution

Abstract

Since the turn of the century, not only have Sri Lankan exports declined as a share of its GDP, but also in terms of its global share. Sri Lanka had a larger global share of exports at Independence, than at present. There are several reasons for falling behind, but one in particular has received too little attention: The exporting weakness of Sri Lankan SMEs. This Insight sets out that small and medium enterprises (SMEs) are hampered by credit terms of buyers and that export financing solutions are a critical aspect of support for SMEs. The government has an important role to play in realising this solution.