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SMALL AND MEDIUM ENTERPRISES

Small and medium sized enterprises are non-subsidiary, independent firms which employ fewer than a given number of employees, Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most 10 or in some cases 5 workers. SMEs make up a large part of Sri Lanka’s economy, accounting for 80 per cent of all businesses. These are found in all sectors of the economy, primary, secondary and tertiary and provide employment for persons of different skills, skilled, semi-skilled and unskilled. In the agri-business sector SMEs accounts for about 20 percent and in the service sector SMEs accounts for more than 90 percent.

Several important points of policy relevance regarding employment in SMEs are noted below,


  • There is a gender bias in SME employment. Workers employed in SMEs are predominantly men.
  •  Good equal employment practices are needed to correct the above bias and to attract, recruit, retain and promote women in SME employment.
  • SME entrepreneurs do not have sufficient knowledge and experience of personnel management practices. Don’t provide training, health and welfare facilities for employees due to the resulting increase of cost of production.
  • SMEs suffer from a lack of information exchange, leading to conflict, dissonance and other industrial relations issues. More systematic cooperation and consultation with stakeholders is promoted under the new SME policy.


Problems and challenges 

The growth and expansion of SEMs are constrained by problems emanating from product and factor markets and the regulatory system they operate in.
These problems fall into broad areas of access to finance, physical infrastructure, level of technology, regulatory framework, business development service. compounding these difficulties, the prevailing business and regulatory environment raises costs and creates unnecessary hurdles.

Characteristics of successful SMEs



  • Be passionate about your business, and be persistent, no matter what .
  • Be a life-long learner and update your skills .
  • Stay calm under high pressure .
  • Be willing to fail and learn from your mistakes.
  • Strive for continuous improvement.

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