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

It is believed that the central government should take steps to re-organise the
CRBs and de-link them from MPCS management as was recommended in 1992
by the Presidential Commission on banking and finance. The CRBs’ could, for
example, be incorporated in the Regional Development Banks with shares issued
to the MPCSs’ or become an independent Co-operative Banking System. These
are two of a range of options that need to be examined urgently to help protect the
CRBs and their assets and give an incentive for continued growth.
It is believed that the donor community and the government could assist in the
development of a capacity building institution for CRBs and the Regional
Development Banks. At present neither institution has adequate training in the
areas of social mobilisation and microfinance best and good practices to achieve
continued sustainable growth.
Local Non-Government Organisations
No one has ever calculated exactly how many local NGOs are practising
microfinance in Sri Lanka. The sources of registration for NGOs are not able to
provide lists of which NGOs are active and which NGOs practice microfinance.
Furthermore most NGOs that are active engage in a range of activities and
microfinance is not necessarily their main activity. These include activities related
to, for example: gender awareness, health, nutrition and diet, pre-schooling, water
and sanitation, education, training and religious education.
Due to these factors it was decided to screen out CBOs and local NGOs with loan
portfolios below SLR 250,000. A questionnaire was devised and district
representatives of both the NGO Consortiums and NGO Councils were asked to
distribute the questionnaire. Where significant NGO activity was in place but the
bulk of the NGOs had portfolios below the criteria, questionnaires were
distributed to the largest of the organisations. In these cases we relied upon the
local knowledge of the distributing officers and the knowledge and field follow
up surveys of two team members.
The NGO questionnaire survey identified a total of 74 NGOs practising
microfinance in 19 Districts throughout the country that showed a total number of
105,218 savings accounts at a value of SLR 118,327,719 and disbursed 57,610
loans to a value of SLR 212,385,761. 17 In the course of the wider survey of
microfinance actor activity and not accounting for multiple branches of the same
organisations a total of 141 discrete NGOs practicing microfinance were
identified.
Of these approximately two thirds operate in the North and East region being
funded primarily by AusAID, CIDA, NORAD, OXFAM, and UNHCR. However,
of these, the 74 NGOs responding to the questionnaire represent 52% of the
known NGO organisations practicing microfinance in Sri Lanka identified by this
survey as a whole. It is still not know exactly how many local NGOs practice
microfinance however it is believed that most of the larger microfinance
practitioners were identified and responded to the questionnaire. The key savings
and loans activities are given in detail in Part D with a summary of these
presented below.
17 A more detailed summary of local NGO microfinance activity by district is included in the
technical appendix at the end of this report.