Discussion on Strengthening Finance and Investment Ecosystem for Inclusive and Sustainable Businesses (ISBs)

Recognizing the pivotal role businesses play in achieving the Sustainable Development Goals (SDGs), the Sustainable Development Council (SDC) spearheaded the formulation of the Strategy to Promote Inclusive and Sustainable Business to achieve the SDGs (ISB Strategy), which was launched in early 2024. The Strategy proposes identifying the financial needs of Inclusive and Sustainable Businesses (ISBs) and developing a roadmap to connect ISBs with existing financing and investment opportunities.

In line with the recommendations of the ISB Strategy and stakeholder requests, the SDC, in discussion with the Department of Development Finance of the Ministry of Finance, convened a roundtable discussion today to raise awareness of opportunities to support access to finance for ISBs and to identify concrete actions for improving financing and investment access.

The session sparked valuable insights and a strong commitment to building a more inclusive and sustainable rural MSME economy through enhanced collaboration, innovative policies, and strategic actions aimed at unlocking the potential of global impact investments. An important issue that emerged from the discussion was the need to address the gaps in the current financial regulations to be more aligned with the national/ local context, particularly the income patterns of agriculture MSMEs and their repayment structures.

The session included a presentation by the Non-Bank Financial Institutions (NBFI) sector, an essential player in the sustainable development and revival of the rural MSME economy, delivered by Mr. Romani de Silva, Deputy Chairman & Managing Director of Alliance Finance Co. PLC. The presentation primarily highlighted global impact investing opportunities for the MSME sector and the necessary support the NBFI sector requires to invest in MSME value chain development. Another presentation was delivered by Mr. Vasanthan Sivakajan, Senior Manager , Impact Investing at Lanka Impact Investing Network on 'Catalyzing Impact Capital: Grassroots to Growth' focusing primarily on the Social Enterprise Fund, Sri Lanka’s first impact investment fund established to support the growth of SMEs. Regulators also shared their views, challenges, and way-forward strategies, particularly the Central Bank of Sri Lanka (CBSL) and the Securities and Exchange Commission (SEC).

As an outcome of the discussion, it was agreed to develop a roadmap based on the key areas identified, with the aim of fostering a more enabling finance and investment ecosystem for ISBs.

The session was attended by the Director General of the Department of Development Finance, Mr. Manjula Hettiarachchi and other officials, representatives from the Ministry of Industry and Entrepreneurship Development, Board of Investment of Sri Lanka, Central Bank of Sri Lanka, Securities and Exchange Commission of Sri Lanka, Sustainable Development Council, Sri Lanka Banks' Association, Finance Houses Association of Sri Lanka and the Lanka Impact Investing Network. The discussion was moderated by the Director General of SDC, Chamindry Saparamadu