In New Delhi:
Minakshi Seth
Phone: +91 11 4111 1000
E-mail: mseth@ifc.org


Colombo, December 22, 2008—IFC, a member of the World Bank Group, is facilitating the streamlining of business licensing processes in Matara in the Southern Province of Sri Lanka, which could help promote entrepreneurship and economic growth in an area that is home to one-fifth of the country’s population.

The initiative, undertaken in collaboration with the Matara Municipal Council, is designed to make it easier for companies and small enterprises to obtain licenses and permits for starting a business. It is being led by IFC Advisory Services in the region—the SouthAsia Enterprise Development Facility. IFC-SEDF is funded by the governments of Norway and Netherlands, and by IFC.

“IFC will help us eliminate activities of little value, while adding value by making improvements in cost, time, and quality of services,” said C. Withanachchi, Municipal Commissioner for the Matara Municipal Council. “An increase in business licensing and participation in the formal economy may result in an increase in the tax base, leading to more revenues for the municipality.”

IFC has a strong track record in working with governments and municipalities to simplify business regulations globally as well as in Sri Lanka. IFC previously worked with the Colombo Municipal Council to streamline its business licensing processes. Business licenses in Colombo are now being issued within an average of 32 days.  

Per Kjellerhaug, IFC’s Regional Manager, said: “Simplification will make business processes more efficient, increase satisfaction among small and medium businesses and contribute to a more positive work environment for municipal employees.” He also noted that the partnership between IFC and the Matara Council will create long-term economic benefits within the municipality.

The Matara project will be a replication of the Colombo project. Matara has a population of 3.8 million, about 20 percent of Sri Lanka’s population. Southern Sri Lanka contributes 9 percent of the country’s gross domestic product. More thanr 80 percent of the businesses in the region are classified as small and medium enterprises.  Many of these demonstrate significant untapped potential to generate growth, income and employment.

The Matara Municipal Council has been a strong driver of this project. It has shown a vision for creating an enabling environment in which businesses grow and prosper in Matara, the main commercial hub in the south of the country. The simplification process will make changes in the way small businesses participate in the formal business sector.