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

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This type of situation is seen throughout the extension services to the primary industries and includes the Industrial Development Board (IDB) that is nationally charged with training and technology transfer to industries other than agriculture, livestock and fisheries. The buildings and clerical staff for all these departments are present in abundance, as they are in the provincial and central government offices, but there is a lack of technical expertise and commitment to actually working ‘in the field’ with the entrepreneurial population. The IDB officers in Vavuniya and Jaffna admit that they cannot undertake the essential work required to give support to the development and growth of local enterprises with the resources that are presently supplied by the government. They instead have looked for support from international organisations including IT equipment and software, transport facilities and other resources and are acting as technical support to interventions funded and resourced by these organisations. Overview of the International Community in the North & East The international community and NGOs are in the main substituting for a significant amount of the GoSL’s normal responsibilities in health, education, vocational training and social welfare, either through grants or direct interventions at the community level. The international community is also involved in assistance to the conflict affected populations through both relief and rehabilitation, with a view to establishing development strategies for the longer term. The International Committee of the Red Cross (ICRC) and the United Nations High Commissioner for Refugees (UNHCR) are the main emergency and ‘protection’ agencies within the region. They provide a ‘watching brief’ on human rights including the visitation of conflict accused political prisoners and tracing those reported ‘missing’ in the conflict affected areas. ICRC is based all of the regional districts and acts as a neutral entity between the protagonists, providing medical assistance and the handing over of the bodies of those killed in the direct fire zones of the conflict. The ICRC also manages a ship that transports hospital patients and certain classes of passenger and goods between Trincomalee and Jaffna on a weekly basis. UNHCR is based in the districts of Jaffna, Vavuniya, and Trincomalee and the area known as the Wanni. UNHCR undertakes the work concerned with the welfare centres for the displaced population and is assisted in this by some other agencies and international organisations. During emergencies, such as the displacement in Jaffna in mid 2000, the international agencies and organisations act in concert to provide emergency assistance for the displaced populations. The United Nations Children’s Fund (UNICEF) has a physical presence throughout the region and in the main oversees relief and rehabilitation initiatives focused on vulnerable families and children that are implemented through the GoSL and NGOs. The initiatives include sectors such as Health, Nutrition and Education and recently microfinance for income generation activities for widows.
The United Nations Development Programme (UNDP) is based in the Jaffna, Trincomalee and Vavuniya of the North and East region. UNDP initiated a rehabilitation programme in early 1998 in Jaffna that undertook interventions in health, agriculture, livestock, vocational training, government capacity building, resettlement, land mine detection & clearance and economic mobilisation. UNDP has recently started a new ‘Umbrella’ programme that will operate throughout the region during the next five years. This programme focuses on assisting resettled, relocated and host communities in establishing sustainable livelihoods. UNDP plans to open offices in the districts of Ampara, Batticaloa, Mullaitivu in the near future. Of the INGOs engaged in relief and rehabilitation activities, CARE, FORUT, Oxfam, GTZ, Save the Children Norway, World Vision, and ZOA all operate a wide range of interventions that include microfinance projects and programmes as funder-practitioners. In terms of International Agencies, UNDP, UNICEF and UNHCR are presently or have until very recently all been microfinance granterpractitioners. Demand for microfinance services in the North & East Region Microfinance is structured according to the economic status of the client and localized characteristics of demand & supply the microfinance findings are presented in terms of the loan level whilst Enterprise Development Services (EDS) are presented in terms of the sources of demand. Loan Levels in Microfinance We have chosen to examine microfinance activity according to the size of loans. In this regard we have segmented loan activity into five levels according to type and utilisation, as shown in the following table however, we realize that there is a certain amount of overlap between the levels. Table 48 Microfinance loan levels and utilisation purposes Level Level of Loan (SLR) Loan Utilisation 1 0 – 3,000 Consumption 2 3,000 – 7,500 Consumption & Income Subsistence 3 7,500 – 30,000 Micro enterprise Start Up 4 30,000 – 50,000 Micro enterprise Expansion 5 50,000 – 500,000 Small Business Formalization & Start -up Loan utilisation categories fall into two broad types: Consumption level loans and Production level loans with pure entrepreneurial activity generally beginning at level 3.
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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
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Society members have access to cred
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The RDBs were re-structured in 1998
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Table 25 Value of Loans Disbursed b
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The total savings and credit issued
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Table 29 Samurdhi - Loans by Distri
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In 1998 SEEDS converted to a separa
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Within the loans from SEEDS funds t
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The Arthacharya Foundation practice
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The program was assisted by some li
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However in general the majority of
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Table 33 Growth of MPCS CRBs -1990
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As at the end of December, 2000 a s
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Some 1,176 of the 1,476 Co-operativ
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A total of 74 NGOs were identified
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Finally only a small proportion of
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Table 38 TCCS Active Societies and
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District Unions - National Federati
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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 164 and 165: Figure 9 Linking of the RBIP Tools
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 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
Page 214 and 215: The MPCSs were equally disrupted an
Page 216 and 217: The main body of the survey is pres
Page 218 and 219: Local NGOs 11 NGOs were identified
Page 220 and 221: Local NGOs 1 NGO was identified in
Page 222 and 223: Local NGOs 1 NGO was identified in
Page 224 and 225: Local NGOs 2 NGOs were identified i
Page 226 and 227: Local NGOs No NGOs were identified
Page 228 and 229: Gampaha District Microfinance Overv
Page 230 and 231: Hambantota District Microfinance Ov
Page 232 and 233: Jaffna District Microfinance Overvi
Page 234 and 235: Staring in 1998 each DS received SL
Page 244 and 245: Matale District Microfinance Overvi
Page 246 and 247: Matara District Microfinance Overvi
Page 248 and 249: 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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