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

Table 35 CRB Loans by Utilisation
Purpose
Rice Cultivation
Potato Cultivation
Agriculture(Other)
Animal Husbandry
Housing
Cottage Industry
Self Employment
Trade
Fisheries
Consumption
Other Purposes
__________________________
Loans as a % of
Volume
1.5
.19
3.9
2.6
51.5
5.3
6.6
11.1
6.6
.3
9.6
Housing loans are by the far the most important category and the average housing
loan was SLR25,300. Pawning loans averaged SLR3040 during the year 2000 and
a considerable portion of the pawning loans are for income generating purposes
especially paddy cultivation as seen in Polonnaruwa.
Unfortunately the accounting and auditing standards are very poor and it is
believed that bad debt provision is inadequate since the People Banks terminated
its supervisory role. The extent of misuse of CRB funds by MPCSs is not clear
although there are allegations of construction of huge buildings, purchase of
vehicles, transfer of CRB funds to off set MPCS losses. The lack of proper
external auditing outside of the ACCDs is a problem that needs to be urgently
addressed.
Today the CRBs are by far the largest combined microfinance agency in Sri
Lanka with SLR5.5 billion savings accounts of which over 90% are below SLR
100,000. The CRBs are arguably the most preferred savings agency by the poor
and indicates that as much as 722,027 or 37% of the estimated 1,954,090
outstanding loans of all leading microfinance agencies as of 30 th June 2000 were
provided by CRBs. however there appears to be hardly any write off and little
donor attention except by the UNDP in Jaffna paid to CRBs to maximize their
potential (Charitoneko & de Silva, 2001).
There is no charismatic leader as in the TCCS or Sarvodaya (SEEDS) movement
to market their potential and they are not attractive as NGOs are for donors.
Another reason is that the CRBs are not short of money having investments of
over SLR 8 billion and a massive gap between savings and what is on-lent.