Nov 1, 2022
Helping MSMEs in Sri Lanka Recover in the Aftermath of the Pandemic
Micro-, small- and medium-sized enterprises (MSMEs) faced many challenges during the COVID-19 crisis, ranging from shortages of raw materials, declines in both local and global demand for products and services, and difficulties repaying loans. Many well-performing local industries were forced to shut down across the world.
In response to the pandemic, the United States Agency for International Development (USAID) is helping MSMEs recover from COVID-19 related setbacks and become more resilient. In Sri Lanka, the USAID CATALYZE Private Sector Development (PSD) Activity provided $1.7 million in stimulus grants to MSMEs. These emergency relief grants not only bolstered MSMEs’ resilience and ability to adapt to the long-term economic impacts of COVID-19 but also encouraged innovation and expansion into new markets across the country.
For example, USAID CATALYZE PSD granted NatureWins, a women-owned and women-led business based in Pooneryn in northern Sri Lanka, $50,000 to invest in new machinery that would expand production and increase the business’ competitiveness. Established in 2019 by Francis Jasmin and her sister — both graduates in mechanical engineering and agriculture — NatureWins is the first cashew processing plant in the region and focuses on providing employment for women and people living with disabilities. Without the grant, the company wasn’t able to access the financing needed to grow the company. Financial institutions were hesitant to lend during this turbulent time. This, coupled with the business’ debtors’ inability to honor payments, meant that NatureWins faced serious cash flow issues. Furthermore, the packaging had a short shelf-life, resulting in an increase in returns due to low sales. As a result, the company was forced to shut down operations for three months.
During this turbulent time, the CATALYZE PSD grant enabled NatureWins to improve packaging to extend shelf life and reduce the return of goods, directly impacting revenue, bottom-line, and entry into new markets. The company also used the grant to increase its staff’s capabilities in managing financing and trained key staff on improving the product’s nutritional value.
In addition to enhancing the company’s competitiveness, CATALYZE PSD provided NatureWins direct assistance in obtaining debt financing, which allowed the company to receive funding from a credit scheme at a reduced rate, providing critical funds for improvement.
With USAID CATALYZE’s support, Jasmine is reaching wider markets and increasing employment for the community, especially women, by increasing production capacity. The company hopes to work with a Business Advisory Service Provider and introduce innovative printing and packaging materials, another area that CATALYZE PSD will assist with in the future.
“Our business expanded, and revenue doubled,” said NatureWins CEO Jasmine. “We were also able to increase employment opportunities for more women in the community. PSD supported us during a very critical period easing our financial and mental stress.”
USAID CATALYZE aims to unlock $2 billion in private capital for inclusive and sustainable economic growth for MSMEs in underserved social sectors and frontier countries.
