The Colombo Stock Exchange (CSE), in collaboration with the U.S. Agency for International Development (USAID) CATALYZE Sri Lanka Private Sector Development (PSD) Activity, organized an Issuer Forum in Jaffna to shed light on alternative funding options for businesses in the Northern Region. The event aimed to bridge the knowledge gap regarding capital markets and highlight the advantages of listing on the stock exchange.
Rohan Senewiratne, Managing Director of Atarah Capital, addressed the forum, emphasizing the prevalent reliance on bank loans as the sole source of business capital among northern entrepreneurs. He stressed the importance of a diversified capital structure, advocating for a healthy balance between equity and debt financing. Senewiratne pointed out the drawbacks of excessive dependence on bank loans. Businesses endure significant interest payments, squeezing profits in both prosperous and challenging times. Moreover, loan defaults during economic downturns, like the recent pandemic and economic crisis, can lead to asset forfeiture through collateral seizure.
Senewiratne proposed listing on the CSE as a solution, allowing companies to achieve a strategic mix of equity and debt capital. This forum marked Atarah Capital’s third invited participation within the past six months, signifying their commitment to promoting alternative financing methods.
USAID’s involvement in the forum was acknowledged by Christopher Powers, Director of Economic Growth. He emphasized the United States’ support for a free-flowing capital market to foster Sri Lanka’s economic growth. Through CATALYZE PSD, USAID has extended its assistance to companies in the food, agriculture, and information and communication technology (ICT) sectors within the Northern Region. The forum welcomed entrepreneurs and business personnel from various industries, including food and beverage, hospitality, healthcare, manufacturing, and exports.