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

The project’s overall approach reflects GTZ’s Development Orientated
Emergency Aid concept that is using the rehabilitation process to lay the
foundations for sustainable long-term development activity through practices that
stimulate the population’s self-help capacity (GTZ/JRP, 2001).
The present GTZ/JRP strategy of identifying ‘cluster groups’ of people affected
by the conflict and assisting them by introducing ‘key’ rehabilitation projects
through a process of people cantered participation, has produced clear and
positive results. The concept has in the main worked well and with its outreach to
over 100,000 families is without doubt the broadest and most comprehensive
single agency programme in the Jaffna Peninsula.
Many of the rehabilitation project ‘target groups’ have joined with the other
members of the village community to form larger and more cohesive ‘community
groups’. This building of community groups is in the main cantered on the
planning and construction of community buildings. To enlarge and modify the
community buildings savings schemes were started to encourage community
participation and on completion of the community building the savings schemes
continued and began to include giving credits for both consumption and
production.
In some cases there has been a move towards integrating the community groups
with local CBOs & NGOs. A brief appraisal of these organisations showed that
most, affected by the prolonged conflict, have weak structures and an
impoverishment in skills, knowledge and experience that requires a planned
rebuilding of capacities before they can become sustainable partners.
This process, demand driven by the communities themselves, was in many cases
in need of guidance as there is little knowledge and much less experience in
operating financial schemes in a manner that is sustainable.
However there are some community groups and NGOs operating sustainable
schemes and these stood out as ‘bench mark’ schemes for the other groups.
Over time the CBOs’ looking to leverage larger loans for their members and to
ensure their own sustainability begin to link or merge with larger local Non
Governmental Organisations (NGOs) and Co-operative Societies.
GTZ/JRP decided to adopt a strategy that introduced an assisted process of
economic mobilisation for the community groups and gave access in place of
subsidy, interdependence rather than dependency and the attainment of
sustainable livelihoods for a community affected by conflict (Gant, 2001).
The Process is graduated through four stages:
Stage I The ‘target groups’ are encouraged to enlarge their membership to
include the community as a whole through joint self – help effort
in the planning and construction of the community building. This
could also be the start point of a savings scheme that is utilized to
modify the basic design and size of the community building.
Stage II The community groups, (CBOs.) start a formalized savings &
credit scheme with training from the GTZ/JRP microfinance unit
and credit plus inputs from national and international service
providers. Credit would be given here mainly for consumption &
income generating projects at the subsistence level.
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