3 July 2024 01:43 am Views - 343
By Nuzla Rizkiya
Women entrepreneurs in Sri Lanka are set to receive a fresh push from the government, with the launch of a new loan scheme aimed at supporting their Small and Medium Enterprises (SMEs).
The Cabinet of Ministers yesterday approved a proposal presented by President Ranil Wickremesinghe to implement a special loan scheme amounting to Rs. 2 billion in credit facilities offered to women-led SMEs.
The Rs. 2 billion revolving fund for the scheme was obtained from the Rs. 20 billion SME encouragement loan scheme, approved by the Cabinet last February.
The new loan scheme allocated solely for women-led SMEs will come into effect from July 1, 2024.
“It is observed that women’s participation in Sri Lanka’s economic affairs is at a lower level than other regional and Asian countries. The special loan scheme is implemented to remove obstacles for women to engage in economic activities,” the Department of Government Information stated.
Sri Lanka stood among the bottom 20 economies in the world with regard to female workforce participation, according to 2023 data sourced by the World Bank and International Labour Organisation (ILO).
With a female labour force participation rate of 32 percent, the island nation showed a significantly lower rate compared to the global average of 49 percent.
In terms of women-led micro, small, and medium-sized enterprises (MSMEs), female entrepreneurs in Sri Lanka face an estimated US$ 17 billion financing gap, according to the Asian Development Bank (ADB).
This is despite women representing more than 20 percent of the overall MSME sector in the country.
Experts have identified access to finance, limited financial literacy, and the lack of property or security required to obtain a loan as the major obstacles faced by women entrepreneurs, contributing to the financing gap. Accordingly, several local and international organisations, including the United Nations, have called for urgent action to address gender inequality and payment disparities in the sector.