Phase IV (from 1 January to 31 March 2015) In the fourth phase of the consolidation programme, we expect to complete the mergers and acquisitions by addressing post-merger issues. Further, we will assist and facilitate the parties to resolve any concerns that have emerged during the merger process. The modified regulatory framework too is expected to be issued at the beginning of 2015, and awareness programmes will be conducted to educate the key management personnel and staff of the financial institutions on the same. Overall progress of the consolidation programme From the inception of the financial sector consolidation programme in January 2014, the progress made so far by the banks and NBFIs is commendable. As of mid-September 2014, 8 Banks and 29 NBFIs have confirmed their merger and acquisition transactions under the consolidation programme while a few cash-strapped NBFIs are progressing under the restructuring process. In addition, 4 banks and 4 NBFIs are in the process of finalising their consolidation plans. The Consolidation Unit strongly believes that the Central Bank is in a position to meet the original time plan set for end 2014 for the completion of the consolidation process. Conclusion Ladies and gentlemen, let me now conclude my oration by emphasising on a few points. We all know that consolidating a diverse group of financial institutions is a very complex process and a challenging task. Sri Lanka has followed a very novel model in reforming the financial sector in a non-crisis environment, which gives us the comfort to resolve these complex issues smoothly.
There are factors which exist outside the financial system and beyond SMEs which nonetheless affect resource flows. These might include poor infrastructure, bureaucracy which makes it difficult to carry out business, an unattractive tax regime and unclear or unfavourable government policies. Acquiring an appreciation of these factors and appropriately dealing with them can help to foster the efficient use of available financial resources by SMEs, increase their success in the application of credit and therefore give positive feedback to financing institutions which itself encourages them to lend more to the sector. Let me conclude by wishing you all a fruitful three days of deliberations and to reiterate my challenge to you to attempt narrowing that undesirable gap between the identification of problems and the delivering of practical solutions that will enable the flow of appropriate and sustainable financial resources to SMEs to enable them to play their wealth creation and development role in Africa. For me, the SME sector can be a great engine for economic development in Africa. Meetings like this can help in making them become just that. But we must also go beyond just paying lip service to the sector and show true and real commitment to making the sector strong on our continent. I suspect that to go beyond lip service might, in some instances require a paradigm shift on the part of financiers, governments and the players in the SME sector itself. I thank you for your attention!!! BIS central bankers’ speeches  3