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

The TCCS movement has been adversely affected by direct competition and
the conflict in the last decade, no one knows for certain how many of the more
than 8,000 registered societies are still active.
SANASA presently appears to be an ineffective regulatory body.
There are high levels of ‘political capture’ throughout the government
programmes, the co-operative movements and local NGOs in the North &
East region.
There are significantly less local NGOs practising microfinance than was
previously thought.
Local NGOs represent less than 5% of national micro-credit service provision.
Local NGOs provide between 50% and more than 90% of micro credit
activity in the North and East region, depending on the district.
There are still very few NGOs in the North and East region that could be
categorised as professional MFIs.
Taken as a group, the INGOs and multilateral agencies oversee the majority of
micro credit activity in the North and East region.
2. The Funding of Microfinance in Sri Lanka
The funding of microfinance has the following key characteristics:
Most micro credit activity is funded through savings.
There is little need for large-scale direct grant in aid funding of financial
instruments other than in the North and East region and possibly second tier
wholesale organisations.
There is a need for widespread technical assistance funding throughout much
of the country.
There is an urgent need for a range of economic recovery initiatives to be
funded in the North and East region that use ‘hard’ and ‘soft’ policy tools
focused on wide spread enterprise development.
Broad based community targeting should be accompanied by the funding of
schemes that specifically target ‘special’ groups such as, demobilised soldiers,