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.

Ladies and gentlemen, The second challenge is in forging strong collaboration and cooperation among key stakeholders and overcoming the collective action problem. When it comes to costly and difficult action, we always prefer others to do it. Ministries, government agencies, policymakers and regulators must therefore set aside their differences and work for the greater good, consolidate their strength based on their shared values and work collaboratively to develop and bring creative ideas for sustainable development into fruition. Initiatives need to be driven beyond personal motivation and belief. Strategies need clear milestones with clear accountability by stakeholders. Sector-specific approaches need to converge to limit risks of a disorderly transition. The journey of sustainability is therefore one that is best navigated collectively. We have to come together to support joint and coordinated responses to mitigate unsustainable practices. For the Malaysian financial sector, the formation of the Joint Committee on Climate Change was an important milestone in pursuing collaborative actions for building climate resilience. A key mandate of the Joint Committee is to facilitate collaboration between key stakeholders in advancing coordinated solutions to address arising challenges and issues. This is in addition to building industry capacity, and identifying issues, challenges and priorities facing the financial sector in managing the transition towards a low carbon economy. The third challenge that we face as a developing nation is in balancing sustainability and competing socio-economic priorities, given our limited resources for transition to low-carbon economy.