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

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Figure 9 Linking of the RBIP Tools for improved management decisions Field Officers & Branches Data Data Impact Monitoring Data Information & Decisions Data Management Information System Information Geographic Information System _______________________________ The RBIP approach is rooted in the German Technical Cooperation concept Promotion of the Regional Economy" (PRE). In PRE a number of complementary projects are linked to create horizontal and vertical synergies in order to decrease the economic disparities between rural and urban growth poles (see Chart 2 below). Thus, experiences with the promotion of rural economies from the micro and meso level are fed into macro level advise to policy-makers and researchers. Similarly, the projects work together to provide better and coordinated services to various economic actors (e.g. banks and producers) in order to mobilise the potentials of rural growth centres. Figure 10 Promotion of the Regional Economy - Creating horizontal and vertical linkages Input Suppliers Producers Processors Marketers Financial Services Business Information Technical Services Training Services Policy Makers & Researchers
Field Officer Concept As part of RBIP’s assistance to the People’s Bank to improve and increase MSME-lending, it has introduced Field Officers at the branch level. The main objectives of appointing at least one bank officer per branch as Field Officer are: (a) to access new loan opportunities; (b) to recover overdue loan instalments; and (c) to act as customer relations officers. While the Field Officer Concept itself is not new, it was an important step for the People's Bank to go there where the customers are. The initial focus on loan recovery paid off very quickly improving the People's Bank's recovery rate in the Kandy region from 87 to 95% within two years. However, the focus has shifted. Today, the Bank increasingly uses the Field Officers as Business Promotion Officers. They are being trained and given more responsibility to find new customers and to prepare and process small business credit proposals. The Field Officers have also become a crucial part of the RBIP approach on Finance Plus Services: the attempt to make the People's Bank provide not only financial but also some non-financial services to their customers, such as marketing advice, business planning, and management training. This has created awareness amongst bank staff that their customers' business is also their business because if enterprises are successful they can repay their loan and most likely take a bigger loan next time. Since Field Officers deal directly with small business customers, the RBIP also provides training in areas not directly linked to banking. They learn about the industries relevant to their branch areas. For example, a product designer is being sponsored by the Bank to conduct a series of practical workshops with brasswaremakers and "their" Field Officers. Thus, not only do the entrepreneurs get new design ideas but also the Field Officers learn about their clients technical and financial needs - new loan applications become easier to assess. The Field Officers are an important data and information source for the Bank. They feed loan data into the Management Information System, inform the Bank on new customers and business opportunities, and they are instrumental with providing information for impact monitoring. Multi-Purpose Small Business Loan ("People's Fast") In the past, many MSME customers were deterred by the difficult application procedures and slow processing involved in getting a loan - even if the interest rate was subsidised. Aware of this problem, the RBIP assisted the Bank to make changes in its loan administration in order to simplify the documentation required for credit applications and streamline the processing of loans. A new multi-purpose loan for small enterprises was launched in 1999. The objective was to process MSME loans quickly and with as little paper work as necessary. The loans are mostly for working capital but also for capital investment. The loan is called People’s Fast to stress its advantage over other products. However, it is a non-subsidised loan at market interest rates.
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National Microfinance Study of Sri
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(b) Lenders .......................
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Introduction into the pawning busin
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Microfinance Overview .............
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Savings ...........................
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List of Tables Table 1 Microfinance
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Table 70 Ratnapura District Microfi
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JBIC MFI MFN MIS MPCS MSME NCPPDP N
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Figure 1 Map of per Capita Value of
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Figure 3 Map of per Capita Value of
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Executive Summary This report provi
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Practitioner Microfinance Activity
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As a result the banks are moving aw
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The operating conditions of the con
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Donor Strategies There should be a
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Introduction to the Study The objec
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The survey does not claim to repres
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Introduction Socio-Economic Overvie
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These five years saw a spate of new
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The 'Economic Stream' Employment is
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Microfinance Clients and Beneficiar
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1. Funders of Microfinance in Sri L
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CIDA believes that microfinance act
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The Department For International De
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NOVIB Partnerships tend to be long
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HIVOS The HIVOS Desk concentrates o
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Over time SIDA noted that the loan
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Comment freely given from one of th
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the time period of the project, wit
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Only a very small part of the US 50
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The demand for loans from this fund
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Without permanent access to institu
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This broad strategy means that the
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Beneficiary targeting was generally
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The FCSs were developed the followi
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CARE's new strategy commits the org
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Each CBO determines the level of in
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The project’s overall approach re
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Figure 6 GTZ/JRP - Project Interact
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The Social Development Foundation F
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There are no sector-based quotas ap
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Over the past five years SCN has as
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UNDP in the North & East - The Jaff
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In December 2001 a new UNDP Program
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From previous experience and lesson
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World Vision Lanka WVL believes tha
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Membership Development 3500 3000 25
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Table 14 World Vision - Gramashakth
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ZOA works with community groups in
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At the village society and bank lev
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In Wayamba the sustainability of th
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Table 15 Badulla IRDP - Summary Dat
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DZPDP/WHRDA credit operations comme
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In the initial years they did not f
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Table 18 SPRDP- Loans 1993 to 1999
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(c)Lender-Practitioners The Central
Page 114 and 115: Society members have access to cred
Page 116 and 117: The RDBs were re-structured in 1998
Page 118 and 119: Table 25 Value of Loans Disbursed b
Page 120 and 121: The total savings and credit issued
Page 122 and 123: Table 29 Samurdhi - Loans by Distri
Page 124 and 125: In 1998 SEEDS converted to a separa
Page 126 and 127: Within the loans from SEEDS funds t
Page 128 and 129: The Arthacharya Foundation practice
Page 130 and 131: The program was assisted by some li
Page 132 and 133: However in general the majority of
Page 134 and 135: Table 33 Growth of MPCS CRBs -1990
Page 136 and 137: As at the end of December, 2000 a s
Page 138 and 139: Some 1,176 of the 1,476 Co-operativ
Page 140 and 141: A total of 74 NGOs were identified
Page 142 and 143: Finally only a small proportion of
Page 144 and 145: Table 38 TCCS Active Societies and
Page 146 and 147: District Unions - National Federati
Page 148 and 149: 4. Facilitators a) National Level F
Page 150 and 151: International Centre for the Traini
Page 152 and 153: Funder-Practitioner Microfinance Ac
Page 154 and 155: As practitioner experience increase
Page 156 and 157: Introduction and Approach The major
Page 158 and 159: State-Owned Banks The Bank of Ceylo
Page 160 and 161: Starting in 1994, the NCRCS is aime
Page 162 and 163: The Seylan Bank The Seylan Bank ent
Page 166 and 167: People's Fast reduces loan processi
Page 168 and 169: In addition, RBIP monitors the impl
Page 170 and 171: The Hatton National Bank Case Study
Page 172 and 173: Seylan Bank Case Study The Seylan B
Page 174 and 175: Until 1961 private pawnbrokers were
Page 176 and 177: Bank officials stated that PSC staf
Page 178 and 179: The urban PSCs have on average more
Page 180 and 181: The lack of flexibility has induced
Page 182 and 183: From the borrowers perspective not
Page 184 and 185: The Peoples Bank, on the other hand
Page 186 and 187: Introduction and Approach Internati
Page 188 and 189: Displaced populations are dependent
Page 190 and 191: Large tracts of land have become to
Page 192 and 193: Public markets, shops, guest houses
Page 194 and 195: The previous thriving local economy
Page 196 and 197: The Wanni Access to the area known
Page 198 and 199: Remembering that these intervention
Page 200 and 201: This type of situation is seen thro
Page 202 and 203: People IDPs in welfare centres, sho
Page 204 and 205: World Vision has been working in al
Page 206 and 207: small entrepreneurs have received t
Page 208 and 209: The exception to this is a governme
Page 210 and 211: There has been some continued acces
Page 212 and 213: Introduction and Approach A distric
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The MPCSs were equally disrupted an
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The main body of the survey is pres
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Local NGOs 11 NGOs were identified
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Local NGOs 1 NGO was identified in
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Local NGOs 1 NGO was identified in
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Local NGOs 2 NGOs were identified i
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Local NGOs No NGOs were identified
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Gampaha District Microfinance Overv
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Hambantota District Microfinance Ov
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Jaffna District Microfinance Overvi
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Staring in 1998 each DS received SL
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Matale District Microfinance Overvi
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Matara District Microfinance Overvi
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Moneragala District Microfinance Ov
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Nuwara Eliya District Microfinance
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Polonnaruwa District Microfinance O
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Puttalam District Microfinance Over
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Ratnapura District Microfinance Ove
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Trincomalee District Microfinance O
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Vavuniya district Microfinance Over
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The Wanni Area Microfinance Overvie
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Summary Microfinance Activity by Ac
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The NGO questionnaire survey identi
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World Vision Lanka works in 5 distr
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Given that these figures do not inc
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Overall, 13 of districts had levels
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Averages Value of Loans Table 78 Av
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Volume and Number of Loans The surv
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Findings The key and main findings
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Service Providers The service provi
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those incapacitated by conflict, wi
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Cultures of Dependency in Microfina
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Strategic Recommendations The key s
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Conclusion The study found that the
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Charitoneko, S. and D de Silva (200
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Remenyi, J (1991). Where Credit is
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Technical Appendix
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