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

This broad strategy means that the ADB has had to make changes to its delivery
systems, staffing mix, partnership policies and its monitoring and evaluation
structures and systems. In addition to selecting the appropriate countries in which
to focus on microfinance activities and emphasising the rural sector, the ADB will
act selectively regarding the type of activities to be supported, the modalities of
assistance utilised, and the type of institutions eligible to participate in ADB
supported projects in particular countries.
It is interesting to note that presently in Sri Lanka there are two recently initiated
technical assistance activities, one in the Eastern coastal areas of the country and
one for covering nation wide rural microfinance.
The Japan Bank for International Co-operation
Japanese development assistance is the single largest source of international
development funding for Sri Lanka. Development activities are split between
different organisations and divisions. Most of this funding is focussed on largescale
infrastructure development projects such as rehabilitating the water and
sanitation systems of the city of Kandy, building roads and funding the
construction of a new parliament implemented by the Japanese International Cooperation
Agency (JICA). The Japanese also engage in a range of other social
development activities such as vocational training and support for microfinance
and MSME projects such as PAMP. The Japan bank for International Cooperation
funds microfinance activity in Sri Lanka and has recently sent a mission
to Sri Lanka to reassess their microfinance interventions. JBIC is also considering
a rapid expansion of microfinance support activities through existing funding
channels and policy instruments.
The World Bank
Since 1995, when the World Bank joined the donor community to establish the
Consultative Group to Assist the Poorest (CGAP), the Bank has become
increasingly involved in supporting micro-enterprise finance.
The Bank is a newcomer to this field, having been only modestly involved before
CGAP’s establishment. However, it now has an active lending programme and a
clear strategy known as the financial systems perspective.
Although it was too early to evaluate the Bank’s approach to micro-enterprise
finance as at that time (1999) as only 15 projects had been completed, and
therefore important impact issues such as analysis of the effects of the projects on
the poor and on gender issues, the report stated that the study was important for
three reasons (World Bank, 1999):
Micro-enterprise finance appears to be one of the most promising innovations
to support poverty alleviation in a sustainable way,
The Bank has a rapidly growing involvement in this area and as at 1999 had a
portfolio of some 90 projects, and
The Bank’s adoption of a financial systems approach to supporting these
projects provides a basic standard against which project designs can be
evaluated.
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