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

Conclusion
This survey has looked at microfinance activity in every district in the country.
The objective of the exercise was to take a comprehensive ‘snapshot’ of
microfinance supply in order to determine existing levels of savings and loans
activity throughout Sri Lanka.
Significant levels of savings and credit activity are present in all districts and
most village communities have been mobilised. In terms of micro-credit, the
survey found that nearly two million microfinance loans with a value of SLR 14.4
billion were disbursed during the year 2000. This is the equivalent of one loan for
every two families in the country or SLR 4,299 for every family in the country.
The highest concentration of loans disbursed was found in the districts of
Polonnaruwa, Puttalam, Hambantota and Matara each having double the national
average. The highest volumes of monies lent were found in the districts of
Matara, Kurunegala, Hambantota, Polonnaruwa, Puttalam and Galle.
The survey found that in total there were over seven million savings accounts
with a value of SLR 23.6 billion as of the 31st December 2000. This is the
equivalent of two savings accounts for every family in the country or SLR 7,047
for every family in the country. The districts of Hambantota, Kurunegala, Matara
and Polonnaruwa all had averages of more than three savings accounts for every
family. Fourteen districts had equivalents of more than SLR 5,000 in savings for
every family in the district.
The operating conditions of the conflict affected area and the absence of
government sponsored schemes that target the poorest and major service
providers means that both savings and credit activities are present at much lower
levels in the North and East region than elsewhere in the country. The districts of
Jaffna, Batticaloa, Trincomalee, Mannar and the Wanni area all have less than one
quarter of the levels of loan activity found anywhere else in the country. The
district of Jaffna has an average of over SLR 3,000 in savings for every family,
however the districts of Trincomalee, Mannar, Batticaloa and the Wanni area all
have averages of less than SLR 600 in savings for every family.
The survey was for the period ending December 31st 2000. Since then the
Samurdhi Programme has continued to expand its outreach. It is not at all clear
however if the overall levels of supply have increased significantly in the past 18
months. There is evidence to suggest that the TCCS movement has been
adversely affected by competition from the Samurdhi Programme. Detailed
'ground level' research is required to gain a more thorough appreciation of the
state of the movement. In the North and East Region levels of microfinance
activity have increased in Jaffna since 2001 as displaced savings and credit
groups have regrouped. Savings activity has also increased where Samurdhi has
arrived. Overall, however, savings do not appear to be on the increase yet in the
region and there is little evidence to suggest that micro-credit activities have
increased either. Hopefully this will change as Samurdhi extends its credit
services, commercial activity and employment opportunities picks up and the ongoing
peace process continues.