Keynote Speech made by Dr Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka at the International Conference on Social Enterprise & Social Finance Monday, 28th January 2019 at Waters Edge A Social Enterprise is recognized as an important business model that applies new commercial strategies to maximize improvements in financial, social and environmental well-being. In fact, it is a tool for creating positive social impact; promoting social change; and achieving environmental sustainability. Social enterprises contribute in multiple ways to enhance social inclusion while nurturing women and youth with economic empowerment. Sri Lanka’s efforts to increase Social Enterprise & Social Finance date back to the late 20th century. The early efforts took the form of loans that were granted to overcome the major barriers SMEs faced in raising capital through traditional methods. Thereafter, various measures have been taken to promote and support social enterprises by providing educational, technical and business support services in addition to finance: ❖ Numerous schemes over the years to promote SMEs. They have had a very mixed track record. ❖ Plethora of institutions. Highly fragmented institutional infrastructure with weak coordination ❖ Need holistic approach focusing on training, inputs, finance and markets ❖ Marketing most intractable problem. MSMEs need to be linked to supply chains to address the marketing challenge. To achieve balanced and inclusive growth, it is necessary to have all stakeholders connected to markets: goods and service markets as well as factor markets. Interconnected markets enable the economic ecosystem to foster synergy and enhance productivity for all stakeholders.

They also provide income generating opportunities to all segments of the society leading to reduction of poverty on sustainable basis. The task of transforming our economy into a social enterprise economy continues to be challenging. Though there have been advances, several bottlenecks still persist thereby inhibiting the expected outcomes. The contribution of social enterprises to environmental sustainability, therefore, remains below potential. The role of social enterprises in 1  social inclusion, livelihood development and poverty reduction has room for improvement. Although, the social enterprise sector in Sri Lanka is gathering momentum, a range of different needs have to be fulfilled to uplift its contribution to the economy. These include business modelling, planning, product design, sales and marketing. In this connection, impact investment has been recognized as key to scale up the social enterprise sector rapidly. Further, its social, environmental and economic impact needs to be assessed and reported according to global standards. In this connection, greater use needs to be made of triple bottom line accounting. In addition, social entrepreneurs need to be recognized and rewarded for their achievements at the national level. Emphasis upon knowledge sharing and awareness building on the nexus between social enterprise and social impact can make a significant contribution towards promoting a more effective and efficient process to encourage social enterprises across Sri Lanka.