National Microfinance Study of Sri Lanka: Survey of Practices and ...

With the breakdown in savings is Ampara SLR 31.6 million, Batticaloa SLR 80.1
million, Trincomalee SLR 24 million and Vavuniya SLR 4.1 million." It was also
reported that a total of some SLR 1.9 million in loans had been disbursed to 405
families in the region.
The Samurdhi Program has many strengths as well as potential weaknesses it is
without doubt an exceptional program for the poor, however there needs to be
urgent action to eliminate its weaknesses and to maximize the strengths:
Strengths
Has reached and is reaching a large amount of the poor left out by
previous NGO, Bank and Project microfinance programs.
The Micro finance program is not donor dependent and is entirely based
on savings of the people for capital. Like the CRBs' it also has excess
capital in the form of savings.
It has a good accounting and monitoring systems. Final Accounts for the
entire island wide micro finance program is ready by the middle of the
following month.
The program has excellent on time repayment rates.
Weaknesses
Government control of the program, and political capture of the staff and
programme for example 139, PA candidates came from the programme at
the last election.
Over staffing through political corruption is fairly obvious as for example
there are over 22,000 Samurdhi animators
The lack of focus through mixing microfinance with other work.
It is recommended that:
The microfinance Programme of Samurdhi be privatised, meaning that the
government has to let go control and create an independent organisation that is
overseen by beneficiary and staff representatives as well as professionals from
banking and microfinance.
Ownership should be largely with beneficiaries as savings can be converted
into shares. Separation of the social and infra-structural work from the
microfinance is a necessary part of this process.
There is a need for an unbiased and in depth study of the programme to arrive
at clear conclusions on re-structuring the program and moving it out of the
political orbit. This includes restructuring the staff and systems to ensure an
effective and efficient de-politicised organisation, including the removal of
undue influence by the divisional secretariats and other government officials
presently involved in the programme.
Sarvodaya Economic Enterprises Development Services
SEEDS’ has been in existence since 1986. From its beginnings operating in 80
societies in 5 districts it has expanded to a national level project, operating in over
2,600 societies, covering more than 5,000 villages, in 18 districts, encompassing
nearly a half a million people (SEEDS, 1999)
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