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

Table 13 UNDP Umbrella Project Microfinance Scheme in Jaffna
MPCS Name MPCS RFL Seed UNDP RLF Seed Total of RLF
Fund
Fund
(SLR)
Contribution Contribution
Chankanai 500,000 500,000 1,000,000
Kaithady 900,000 500,000 1,400,000
Manipay 500,000 500,000 1,000,000
Nallur 1,500,000 500,000 2,000,000
Neervely 900,000 500,000 1,400,000
Nelliady 6,000,000 500,000 6,500,000
Udupiddy 500,000 500,000 1,000,000
Totals 10,800,000 3,500,000 14,300,000
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In advance of UNDP’s request for seed fund contributions, Nelliady MPCS had
already committed almost all of their fixed deposits to start a loan scheme. The
Nelliady Board later decided to operate this loan fund as a UNDP RLF and thus
this sum has been recognised as their seed fund contribution.
This commitment also contributed to other MPCS Boards deciding in favour of
making a seed fund contribution from their own surpluses and fixed deposits. In
almost all cases they have committed beyond their current profit and committed
some funds from fixed deposits. This has been approved and encouraged by the
Assistant Commissioner Co-operative Development (ACCD).
The new scheme will be implemented by mid 2002 and due to the present
ceasefire and the possibility of the opening of the Jaffna economy will have a
positive impact on the ‘entrepreneurial poor’ and the economic recovery of the
Peninsula.
The UNDP will grant seed funding in tranches the first being Rs.200,000 and the
performance of each MPCS monitored with agreed repayment ratios and portfolio
management that if maintained will attract the remaining seed funding.
The UNDP’s partner is the ACCD and this office will undertake monitoring and
advise on capacity building needs of each MPCS. The Credit Rural Banks that
operate the scheme inside the MPCSs have received computer hard and software,
training and other mentoring support. The UNDP has allocated funding for 300
credit clients in CEFE training; marketing business skills and women’s
entrepreneurial development – loans will not be granted unless the suggested
training is completed by the client.
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