Over 200,000 SMEs cease operations from 2018 – Minister Dr. Anil Jayantha

Sri Lanka has witnessed a significant contraction in its small business sector in recent years, with more than 200,000 micro, Small and Medium-scale Enterprises (SMEs) ceasing operations between 2018 and 2022, Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando told Parliament yesterday.

Addressing lawmakers, the Deputy Minister highlighted the severe toll of the country’s economic crisis on the SME sector, noting that approximately 108,000 businesses were forced to shut down as a direct consequence of the economic crisis that gripped the nation. He further revealed that an additional 155,000 enterprises closed due to other challenges, underscoring the multiple pressures faced by small and medium-sized businesses.

“These figures reflect not only the impact of the economic downturn but also structural and operational difficulties that have affected enterprises over time,” he said, emphasising the need for targeted policy responses to revive the sector.

Citing data from the Department of Census and Statistics, Fernando stated that Sri Lanka recorded around 1.3 million registered institutions during the 2018–2022 period. However, only about 1.037 million of these remain operational today, indicating a notable decline in active enterprises across the country.

The Deputy Minister also pointed out limitations in the availability of up-to-date data, noting that a comprehensive listing of institutions is conducted only once every ten years. The most recent such census was carried out in 2013, suggesting that current figures may not fully capture recent developments or emerging business trends.

He stressed the importance of strengthening data collection mechanisms and conducting more frequent assessments to ensure policymakers have accurate and timely information when designing economic recovery strategies. Fernando’s remarks come amid ongoing efforts by the Government to stabilise the economy and support business revival. The sharp decline in SME activity has raised concerns among economists and industry stakeholders, given the sector’s critical role in employment generation and overall economic growth.

The Deputy Minister reaffirmed the government’s commitment to implementing measures aimed at supporting struggling enterprises and fostering a more resilient business environment in the years ahead.

Source: Daily News