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

As well as the savings given in the table there was also SLR 8.1 million of
savings at village society level by end Dec 1999 for utilisation as small loans
including those for consumption smoothing. The UNDP provided revolving loan
funds for each federation, which were topped up by savings from village
societies.
The Project came to an end in year 2000 and is now technically supported by the
new Catalytic Initiatives for Social & Economic Empowerment of the Poor. This
project initiated some ‘ground breaking’ credit plus work with the Federation’s as
well as some of the groups supported by the project starting up a number of
innovative businesses.
However many of these businesses were not started through the use of well
thought out business plans and were managed or directed too much by the project
staff rather than from the clients. Some of them such as Kitual Treacle making,
chocolate slab like jaggery making appeared to be a success. In concept some of
these businesses were very good but there was a need for more market
development and business management. The prevailing microfinance practices
were very weak and the reporting of repayment figures was not undertaken on a
regular basis.
Civil Society Organisation Project
This project used South Asian volunteers to form village societies and higher
level federation or apex bodies in six divisions in the border areas of Polonnaruwa
and some of the dry zone villages of Matale that suffer from endemic poverty.
The target group in five of the six divisions were women and the focus from the
beginning was on the higher-level Federation apex development. Very good
training was provided for Federation accounting and savings and credit
accounting by ICRTL and the period of assistance by UNDP was limited.
Each of the six Federations were given a revolving fund of around SLR 2 million
by the UNDP as well as limited training in credit plus activities. The project
started in 1996 and was completed in March 2000. There is some ongoing
technical assistance provided under the new UNDP Programme, ‘Catalytic
Initiatives for Social and Economic Empowerment of the Poor”.
What was remarkable about this program is that with only three years of donor
support divisional level CBOs were formed that are able to function in a
sustainable manner without external support. An example of this is the
Weligapola Federation that is able to generate a large enough surplus to pay the
full time co-ordinator and other part-time workers, it has an excellent set of well
prepared accounts that are externally audited.
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