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

Introduction
Socio-Economic Overview
Sri Lanka’s population is estimated at between 18.73 million and 19.4 million
depending upon whether one includes citizens living abroad or not. The
preliminary estimates of the 2001 national census estimate a total population of
18.73 million. However, for the purposes of this study we have assumed a total
population of 18.77 million 6 as it was necessary to calculate population on a
district-by-district basis prior to the release of the total census estimates.
The average annual growth rate for the period 1984 to 2001 is estimated to be
1.14 percent. This growth rate is well below that of most countries in the South
Asia region and is largely due to the combination of an ageing population and
overall improvement in livings conditions (Census, 2001).
Sri Lanka has been in the process of liberalising its economy for a quarter of a
century, but still has some way to go. The economy has grown at a rate of five
percent in real terms over the last decade. This growth is largely due to reasonable
macroeconomic management and progress in trade liberalisation, privatisation,
and financial sector reform.
Trade accounts for more than seventy percent of GDP and Sri Lanka is South
Asia’s most open economy. It has a relatively developed capital market
infrastructure and a per capita income of US$ 841 in 2000, equating to about US$
2,500 on a purchasing power parity basis. However, the public sector continues to
dominate the financial landscape with per capita employment in the public sector
being the largest in Asia (CBSL, 2001).
It is generally recognised that "In terms of human development Sri Lanka is ahead
of other countries with similar economic development status. Literacy levels,
access to basic health care and access to education are all well above South Asia
averages." (CARE, 2000).
However, Sri Lanka's development continues to remain below its potential and
the secessionist conflict has exacted a heavy price on the country’s overall
performance and poverty persists in the North and East region, the tea plantations
and pockets in dry zone areas and urban slums (c.f. Sanderatne, 2000; Kahn,
2001).
6 According to the 2001 National Census (including Ampara), the Government Agent Office’s in
the North & East Districts (Batticaloa, Jaffna, Mannar, Trincomalee and Vavuniya) and the
estimates of local authorities in the Wanni Area, the total population of Sri Lanka is estimated at:
16,864,544; 1,582,000; and, 328,000, respectively, giving a total national population estimate of
18,774,544 people. According to the 2001 National Census, the average family size is estimated at
5.6 people.
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