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

Microfinance Clients and Beneficiaries
Microfinance is both a traditional community savings tool used by local
community organisations and a ‘tool’ for economic development. As such, the
clientele or beneficiaries, depending on the organisational culture, are primarily,
but by no means exclusively, the poor.
Poverty, however, is not homogenous. Remenyi (1991), for example, has
categorised five levels of poor into a ‘poverty pyramid’. These are: the ultra poor,
the labouring poor, the self-employed poor, the entrepreneurial poor and the near
poor
At the bottom layer of the pyramid are the ultra poor that depend on the earnings
of others. Above them are the labouring poor are employed in low-paid, unskilled
labour positions. The top three levels consist of the self-employed poor who work
for themselves and may employ up to five others, the entrepreneurial poor whose
enterprises employ more than five people and the near poor who have stable,
albeit low wage employment.
This model provides another heuristic when considering different microfinance
activity and approaches. In practice, however, Sri Lankan household economic
livelihoods are complex and there is often overlap between categories. It is also
necessary to consider the poor in the context of the North & East. A more detailed
discussion of this is included in Part C.
Different Kinds of Microfinance Activity
Microfinance is a multiple purpose tool, used in Sri Lanka by different actors, for
different purposes. This includes the use of microfinance: as a government policy
tool for poverty alleviation, as a commercial activity, as a ‘not-for-profit’ social or
cultural development tool and as an intervention tool in areas affected by conflict.
Table 2 Classification of Microfinance Activity
Microfinance Purpose
Government policy tool
for poverty alleviation
at the national, regional
and local level.
Commercial
for-profit activity.
Not-for-profit
social or cultural
development tool
Intervention tool
in areas affected
by conflict.
Organisation
CBSL, Ministry of Planning, Samurdhi, NDTF,
Multilateral and Bilateral Agencies, Ministry Of
Regional Development And Plan Implementation,
Ministry of External Resources.
Bank of Ceylon, DFCC, Hatton National Bank,
National Development Bank, National Savings Bank,
Peoples Bank, Seylan Bank, small private
organisations.
National, Regional & Local NGOs -such as SEEDS,
Agromart, Social Mobilisation Foundation, CRBs,
TCCS, Multilateral agencies and INGOs
Multilateral and Bilateral Agencies, INGOs, GoSL,
local and regional NGOs.
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