Microfinance Industry Report SRI LANKA - Microfinance in Sri Lanka

1. Country Profile
Located at the southern tip of India, Sri Lanka
has a population of 20.01mn. Compared to other
South Asian countries, Sri Lanka displays relatively
favourable socio-economic indicators. GNP per
capita is $ 1,599 1 , the 2nd highest in South Asia
after the Maldives. The population living below the
National Poverty Line is officially 15.2% 2 although
the World Bank estimates it to be around 34% based
on their international poverty line of $2/day. 3 Based
on an average household size of 5 persons, the
World Bank estimate translates to around 1.3 million
poor households. Average life expectancy at birth is
75 years and the overall literacy level is 92.5%, with
female literacy at 90.6%. However, these figures
mask wide regional disparities. Economic activity is
concentrated in the relatively prosperous Western
Province which accounted for over 50% of GDP in
2006, while all other provinces in the country each
contributed less than 10% of GDP. Moreover, more
than 70% of the country’s population is concentrated
outside the Western Province. In the 2007 Key
Indicators of the Asian Development Bank, Sri Lanka
has a higher Gini coefficient than other South Asian
countries such as India, Pakistan or Bangladesh,
implying a more unequal distribution of income 4 .
A summary of key economic and social indicators for
Sri Lanka is given in Table 1 below. See Annex 1 for a
more comprehensive list of indicators.
1 Central Bank of Sri Lanka Annual Report 2007
2 Department of Census and Statistics, Sri Lanka – Household
Income and Expenditure Survey 2006/07. The national poverty
line is at Rs. 2,233/- per person per month (approx. $0.67/day).
3 World Bank PovCalNet October 2008 (Sri Lanka estimate based
on 2005 data).
4 2007 Key Indicators, Asian Development Bank
Table 1
Indicators 2005 2006 2007
Total Population (‘000) 19,668 19,886 20,010
Population Annual Growth rate (%) 1.00 1.10 1.10
Population below poverty line (Poverty Head Count Index) (%) 22.7 (2002) 15.2 15.2
Literacy rate (%) (2003/2004) 92.5 92.5 92.5
Percentage of population living in rural areas (%) (1981) 72.2 (1981) 72.2 (1981) 72.2
Life Expectancy (2004)
Male 71.7 71.7 71.7
Female 77.0 77.0 77.0
GNP per capita (US$) 1,226 1,402 1,599
GNP growth rate (%) 6.0 7.5 7.1
Inflation rate (%) 11.6 13.7 17.5
Annual average exchange rate (Rs./US $) 100.50 103.96 110.62
Banking With The Poor Network 7