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

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CIDA believes that microfinance activity should be complimented by enterprise development services to assist in the creation of micro and small-scale enterprises in Sri Lanka. CIDA’s funding is country wide and targeted mainly to low income groups through partner organisations. CIDA believes that groups such as youth and women from the ‘poorest of the poor’ and the internally displaced from low income families are not yet being reached completely and efforts should be made to reach these highly vulnerable groups through local NGOs’ and co-operatives. The CIDA country development programme framework is being reviewed and until this has been completed there is no present window for new microfinance project assistance. Microfinance specialists assess proposals that are required to be in the English language prior to acceptance for funding assistance. Some staff members have ‘on the job’ knowledge of microfinance schemes as well as previous experience of funding schemes. The CIDA Programme Support Unit (PSU) advisor regularly attends the UNDP Microfinance Network meetings and utilises available advisory services. CIDA believes that there is a need to upgrade the microfinance knowledge and skills of all those working with microfinance in partner organisations and internal staff through formal training and advisory services. For the past five years CIDA has concentrated on a single microfinance project in partnership with Sarvodaya Economic Enterprises Development Services (Guarantee) Ltd. (SEEDS) who supply credit plus services across 18 districts of Sri Lanka. This project is known as the ‘SEEDS Rural Credit Project’ and is an extension of the Small Farmers and Landless Credit Project (SFLC), a previous joint CIDA/IFAD funded project. The project has two components, a credit component comprising a revolving loan fund and a gender component. The credit component consists of CAN$ 1,000,000 that is used as a revolving loan fund for rural communities over 200 village societies involved with SEEDS ‘credit plus’ activities. CIDA has also financed CARE International’s ‘Food Security Project’ (FSP) that had a large segment of microfinance intervention incorporated into the project. From late 1997 and up to December 2001, the FSP provided funding for microfinance services through 10 NGOs, 27 Fishing Co-operative Societies (FCSs) and 28 Savings and Credit (S&C) groups with grants totalling approximately SLR 20,000,000. These two projects are very different in their focus and methodology. The SEEDS project operates outside the areas affected by conflict, with a focus on the development of the rural economy of Sri Lanka. By contrast, the CARE FSP project Jaffna, Batticaloa and the Wanni, with a focus on relief for the communities that have been resettled and relocated after internal displacement. This is where the issue of sustainability comes to the fore, as for example the present SEEDS repayment rates on loans averages ninety-seven percent while the relief based project is reporting repayment rates of fifty percent on loans. However, these cannot be compared directly as one scheme is founded on a stable 45
population that is building up assets and developing enterprises and the other is founded on a population that, until the last two months ago, lived in constant conflict and faced continued displacement, utilising credit, in the main, for consumption smoothing and subsistence-level income generation. With the present stabilisation of the conflict and ceasefire, CARE has formed a microfinance unit headed by a microfinance specialist that is to review all the present microfinance schemes and refocus them towards economic recovery and financial sustainability. There are two other funds that come under the purview of CIDA, these are the ‘Canada Fund’ and the Shakti Gender Fund. Of these the later has supported six NGOs with grants for funding microfinance projects as revolving loan funds in the past five years with a combined outreach of over 4,000 people. Table 5 Shakti Gender Fund Name of Local Organisation Grant Amount (SLR) Mannar Women’s Development Foundation 1,400,000 YMCA Batticaloa 2,000,000 Centre for Women’s Development Jaffna 300,000 Akkeraipattu Women’s Association Ampara 425,000 Women’s Development Foundation Ampara 800,000 EMACE Foundation, Moratuwa, Colombo 444,000 ______________________________ The monitoring and evaluation of projects is undertaken on a quarterly and annual basis with certified statements of accounts. CIDA/PSU staff undertakes regular field visits and receive mid-term and annual progress reports from the partner organisations based on the work programmes and the projects’ Logical Framework Analysis. Recently CIDA has required partner organisations to develop results-orientated reports and impact analysis systems as an essential part of the reporting procedure. The PSU has financed some 20 CBOs throughout the country in recent years and is presently evaluating these activities. Until the present review of CIDA’s country development framework has been completed no comment can be made on its future involvement and assistance to microfinance projects and programmes. 46
Page 1: National Microfinance Study of Sri
Page 4 and 5: (b) Lenders .......................
Page 6 and 7: Introduction into the pawning busin
Page 8 and 9: Microfinance Overview .............
Page 10 and 11: Savings ...........................
Page 12 and 13: List of Tables Table 1 Microfinance
Page 14 and 15: Table 70 Ratnapura District Microfi
Page 16 and 17: JBIC MFI MFN MIS MPCS MSME NCPPDP N
Page 18 and 19: Figure 1 Map of per Capita Value of
Page 20 and 21: Figure 3 Map of per Capita Value of
Page 22 and 23: Executive Summary This report provi
Page 24 and 25: Practitioner Microfinance Activity
Page 26 and 27: As a result the banks are moving aw
Page 28 and 29: The operating conditions of the con
Page 30 and 31: Donor Strategies There should be a
Page 32 and 33: Introduction to the Study The objec
Page 34 and 35: The survey does not claim to repres
Page 36 and 37: Introduction Socio-Economic Overvie
Page 38 and 39: These five years saw a spate of new
Page 40 and 41: The 'Economic Stream' Employment is
Page 42 and 43: Microfinance Clients and Beneficiar
Page 44 and 45: 1. Funders of Microfinance in Sri L
Page 48 and 49: The Department For International De
Page 50 and 51: NOVIB Partnerships tend to be long
Page 52 and 53: HIVOS The HIVOS Desk concentrates o
Page 54 and 55: Over time SIDA noted that the loan
Page 56 and 57: Comment freely given from one of th
Page 58 and 59: the time period of the project, wit
Page 60 and 61: Only a very small part of the US 50
Page 62 and 63: The demand for loans from this fund
Page 64 and 65: Without permanent access to institu
Page 66 and 67: This broad strategy means that the
Page 68 and 69: Beneficiary targeting was generally
Page 70 and 71: The FCSs were developed the followi
Page 72 and 73: CARE's new strategy commits the org
Page 74 and 75: Each CBO determines the level of in
Page 76 and 77: The project’s overall approach re
Page 78 and 79: Figure 6 GTZ/JRP - Project Interact
Page 80 and 81: The Social Development Foundation F
Page 82 and 83: There are no sector-based quotas ap
Page 84 and 85: Over the past five years SCN has as
Page 86 and 87: UNDP in the North & East - The Jaff
Page 88 and 89: In December 2001 a new UNDP Program
Page 90 and 91: From previous experience and lesson
Page 92 and 93: World Vision Lanka WVL believes tha
Page 94 and 95: Membership Development 3500 3000 25
Page 96 and 97:
Table 14 World Vision - Gramashakth
Page 98 and 99:
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
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International Centre for the Traini
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Funder-Practitioner Microfinance Ac
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As practitioner experience increase
Page 156 and 157:
Introduction and Approach The major
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State-Owned Banks The Bank of Ceylo
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Starting in 1994, the NCRCS is aime
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The Seylan Bank The Seylan Bank ent
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Figure 9 Linking of the RBIP Tools
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People's Fast reduces loan processi
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In addition, RBIP monitors the impl
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The Hatton National Bank Case Study
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Seylan Bank Case Study The Seylan B
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Until 1961 private pawnbrokers were
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Bank officials stated that PSC staf
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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 200 and 201:
This type of situation is seen thro
Page 202 and 203:
People IDPs in welfare centres, sho
Page 204 and 205:
World Vision has been working in al
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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
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The MPCSs were equally disrupted an
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The main body of the survey is pres
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Local NGOs 11 NGOs were identified
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Local NGOs 1 NGO was identified in
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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
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Gampaha District Microfinance Overv
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Hambantota District Microfinance Ov
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Jaffna District Microfinance Overvi
Page 234 and 235:
Staring in 1998 each DS received SL
Page 236 and 237:
Page 238 and 239:
Page 240 and 241:
Page 242 and 243:
Page 244 and 245:
Matale District Microfinance Overvi
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Matara District Microfinance Overvi
Page 248 and 249:
Moneragala District Microfinance Ov
Page 250 and 251:
Nuwara Eliya District Microfinance
Page 252 and 253:
Polonnaruwa District Microfinance O
Page 254 and 255:
Puttalam District Microfinance Over
Page 256 and 257:
Ratnapura District Microfinance Ove
Page 258 and 259:
Trincomalee District Microfinance O
Page 260 and 261:
Vavuniya district Microfinance Over
Page 262 and 263:
The Wanni Area Microfinance Overvie
Page 264 and 265:
Summary Microfinance Activity by Ac
Page 266 and 267:
The NGO questionnaire survey identi
Page 268 and 269:
World Vision Lanka works in 5 distr
Page 270 and 271:
Given that these figures do not inc
Page 272 and 273:
Overall, 13 of districts had levels
Page 274 and 275:
Averages Value of Loans Table 78 Av
Page 276 and 277:
Volume and Number of Loans The surv
Page 278 and 279:
Findings The key and main findings
Page 280 and 281:
Service Providers The service provi
Page 282 and 283:
those incapacitated by conflict, wi
Page 284 and 285:
Cultures of Dependency in Microfina
Page 286 and 287:
Strategic Recommendations The key s
Page 288 and 289:
Conclusion The study found that the
Page 290 and 291:
Charitoneko, S. and D de Silva (200
Page 292 and 293:
Remenyi, J (1991). Where Credit is
Page 294:
Technical Appendix
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