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

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HIVOS The HIVOS Desk concentrates on partners who consider microfinance as one of their core businesses, however the funding in the form of grants is focused on both entrepreneur capacity building and the strengthening of the partner organisation as in the cases of Agromart and SANASA. This is probably due to HIVOS knowing of the considerable amounts of funding that is already directed at the loan portfolios of micro finance agencies in Sri Lanka. However HIVOS contributions to microfinance agencies still accounts for a large proportion of the total assistance to Sri Lanka. Table 8 HIVOS expenditure in Sri Lanka Total expenditure (Guilders) 1998 1999 2000 2001 3,736,309 4,817,833 4,580,538 4,887,283 Agromart 900,000 950,000 1,000,000 1.052,500 SANASA (FTCCS) Sub-total MFOs. As a % of total. 500,925 544,937 549,513 967,988 1,400,925 1,494,937 1,549,513 2,020,488 37% 31% 34% 41% Source: Hospes et al. 2001 ______________________________ Dutch agencies have mainly provided grants, not loans, to partner organisations with a microfinance programme in Sri Lanka with the exception recently of NOVIB and its decision to support the banking programme and loan portfolio of SEEDS. Also the bulk of the funding assistance appears to be directed at the capacity building of the partner organisations and their clients. The Sri Lanka desk of NOVIB, ICCO and HIVOS give different priorities to the support of microfinance agencies. NOVIB gives the support of microfinance agencies a high priority as it is focused at ‘direct poverty alleviation’. HIVOS although not having a distinct country policy for Sri Lanka tends to focus on creating greater equality of opportunities for people to access credit on a cost covering basis to assist to them to make small investments to create income. ICCO is the least interested in supporting partners with a microfinance component in Sri Lanka and is much more focused on the conflict as the core problem that is creating poverty in Sri Lanka. 51
The Swedish International Development Co-operation Agency Employment creation is the present focus of The Swedish International Development Co-operation Agency (SIDA) when utilising its development aid in the economic sphere, assisting in the creation and augmentation of small and medium scale enterprises in Sri Lanka. SIDA believes that microfinance is a source of access to entrepreneurial finance as often ‘poor’ entrepreneurs are unable to access through formal financial institutions. Groups such as youth, women from low income families, the broad entrepreneurial community in the North and East region and members of the military services that leave or are de-mobilised from the armed forces being primary targets for access to financial and non-financial services. For the past two years, 2000 and 2001, SIDA has concentrated on a single economic project, ‘Start and Improve Your Business’ (SIYB) project with the International Labour Office (ILO) as the implementing partner. The ILO has successfully implemented the SIYB project in many developing countries and SIDA is confident of its success and impact on the enterprises and micro economies in the selected areas of Sri Lanka. Although the SIDA staff has only ‘on the job’ knowledge of microfinance, specialist consultants are employed to assess proposals prior to acceptance. SIYB trains business development service (BDS) providers, who in turn select and train entrepreneurs who require services such as business and financial information, IT systems and technology inputs to help them improve the profitability of their enterprises. BDS providers are reached through comprehensive campaigns that utilise workshops, the media and direct mailing. The manuals for the programme are available only in Sinhala at present, however manuals in Tamil are being prepared and should be available by the end of 2002. A pilot scheme based in Matara was initiated for the years 2000 and 2001 with grant in aid funding of US$ 1M. Monitoring and evaluation of the project is undertaken on a quarterly basis using a Logical Framework Matrix in the English language, this is backed by half yearly steering committee meetings, a mid term evaluation and impact analysis. The scheme has been adjudged a success and a further US$ 1M has been granted to the project for the period 2002 to 2005 for expansion throughout the country excluding the North and East region. Prior to 2000 SIDA had funded two projects the Matara Integrated Rural Development Project (MIRDP) and the North Central Province Participatory Rural Development Project (NCPPRDP) both of which were implemented through the government. One of the successes of the MIRDP was its assistance in establishing the Enterprise Development Service Centre (EDSC) in Matara and it can be seen that the SIYB is an expansion and augmentation of the EDSC and its delivery of non-financial services for entrepreneurs. There were microfinance segments in both the NCPPRDP and the MIRDP and although these were successful in terms of social and economic mobilisation; providing much needed credit for disadvantaged groups such as youth and women from low-income families, the sustainability of the schemes was suspect. 52
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 46 and 47: CIDA believes that microfinance act
Page 48 and 49: The Department For International De
Page 50 and 51: NOVIB Partnerships tend to be long
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
Page 100 and 101: 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
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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
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The lack of flexibility has induced
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From the borrowers perspective not
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The Peoples Bank, on the other hand
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Introduction and Approach Internati
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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
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This type of situation is seen thro
Page 202 and 203:
People IDPs in welfare centres, sho
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World Vision has been working in al
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small entrepreneurs have received t
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The exception to this is a governme
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There has been some continued acces
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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
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Local NGOs 2 NGOs were identified i
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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
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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
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Moneragala District Microfinance Ov
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Nuwara Eliya District Microfinance
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Polonnaruwa District Microfinance O
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Puttalam District Microfinance Over
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Ratnapura District Microfinance Ove
Page 258 and 259:
Trincomalee District Microfinance O
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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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