Very Bankable Poor of Sri Lanka Offers Opportunity for Micro Finance

14th October 2010, www.lankabusinessonline.com

Sri Lanka's poor are reliable borrowers and repay loans, offering a growth opportunity for micro-finance especially in rural areas, deputy finance minister Sarath Amunugama said.

Developing countries like Sri Lanka must not rely solely on export-led growth as in the past given sluggish recovery and rising protectionism in advanced economies, he told the Asia Microfinance Forum 2010 in Colombo.

The forum is looking at the role of microfinance in ensuring that poor and low-income people have access to reliable financial services.

"The poor are very bankable," Amunugama told the forum organised by the Banking With the Poor Network and the Foundation for Development Cooperation.

"All studies done on micro-credit show that the repayment ratio is much higher than in large commercial banks where a lot of time is spent on non-performing loans (NPLs). There are very few NPLs among the poor - they are bankable."

Amunugama said the government wants to ensure more equitable growth to help poor people, especially in rural areas improve living standards as half the island's economy and growth has been concentrated in the western province where the capital Colombo is located.

"In that context micro finance is most important," Amunugama said.

"You cannot develop lagging, undeveloped areas and create internal markets without providing financial infrastructure that is necessary to develop rural areas, particularly the poorest of the poor."

Amunugama said many microfinance initiatives come from Asia such as Bangladesh's Grameen Bank which found the best business people are women.

"It is the women who go to the market, who trade, largely it is women who need capital and new innovative structures to bring them into affluence."

Amunugama said migrant workers who have returned and start their own businesses were potential clients for micro-finance services.

"We have a highly pro-growth rural and poor population. We have one million Sri Lankans working abroad in various capacities, well known for enterprise, hard work, sending us huge amounts of money.

"When they come back they are mentally ready. They need capital - they are a large reservoir of people who are already pre-disposed to efficient rural activity. So we must now find structures and policies that can generate growth through these people."

"Rural growth is the next phase," he said. "We have to create value in our rural areas and ensure they contribute to growth."

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Sri Lanka Needs Micro finance to Empower Rural Micro Entrepreneurs for Sustainable Development

26th September 2010, www.sundayobserver.lk, By Lalin Fernandopulle

Micro finance is essential for Sri Lanka to empower rural youth and make them micro entrepreneurs for sustainable economic development, said Deputy General Manager, Marketing and Retail Banking and Chairman, Banking with the Poor Network, HNB, Chandula Abeywickrema.

He said micro finance has contributed in a major way to alleviate poverty in the country by empowering the poor with access to capital and making them micro entrepreneurs.

Over 70 percent of the population lives in rural areas which has less access to finance for their livelihood development.

Micro finance provides capital for sustainable livelihood.

"Access to finance through the banking network is low in Sri Lanka due to the high risk and transaction costs.As a result the need for micro finance in Sri Lanka has grown and its contribution to poverty reduction and sustainable economic development in the country is commendable" Abeywickrema said.

He said micro finance is not merely providing credit to those who don't have access to finance but educating them to become micro entrepreneurs and support the rural economy.Micro entrepreneurs contribute to maintain social order and sustain the rural economy.

"The education system in Sri Lanka does not make youth employable. The reason for youth frustration and uprising is that they are not included in the economic fabric of the country. Making youth employable is one of the aims of micro finance", Abeywickrema said.

The roots of micro finance in Sri Lanka could be traced back to the Co-operative Societies and the Sanasa Movement which have been promoting self-employment in the country.

Both has played a salient role in promoting micro finance in the country.

Alleviating poverty and improving the living condition of people has been a pressing need in many countries across the world.Micro finance is a means by which developing countries have been able to reduce poverty by generating income and creating employment in the rural sector.

Micro finance started in Bangladesh with the Gramin Banking concept introduced by Professor Muhammad Yunus in 1976.

Abeywickrema said field officers are vital to drive a successful micro finance program in the country.Field officers support and share the vision of the micro entrepreneur."Passion, patience and commitment are pillars on which micro finance is based on.The loan recover rate of micro finance is high compared to the banking sector", he said.

Poverty alleviation, income generation, employment creation, financial education, creation of multiple income generating revenues for banks and rural economic development and the benefits of micro finance.

Financial inclusion, a developed notion of micro finance provides access to savings, credit, remittances and insurance.

Abeywickrema said the micro finance industry should be regulated and added that the government is in the process of introducing regulations for the sector. "Reducing the transaction cost, increasing the number of field officers and making financial services available, accessible and affordable are some of the major challenges of micro finance", he said.

The Asia Micro Finance Forum (AMF) hosted by HNB will be held in Colombo from October 12-15.The conference will focus on the future direction of the micro finance industry in Asia.

AMF is organised by the Banking with the Poor Network based in Singapore and it is the largest Asia based micro finance network.The Forum which takes place once in two years was held last in Vietnam in 2008.

Related Info:
Sri Lanka Hosts Asia Microfinance Forum 2010 from 12 - 15 October. Mobitel the Silver Sponsor

The Asia Microfinance Forum 2010. Learn more about the Forum here.

Sri Lanka Hosts Asia Microfinance Forum 2010 from 12 - 15 October. Mobitel the Silver Sponsor

09th September 2010, www.island.lk

The Banking with the Poor Network (BWTP) prevails to serve Asia as its core microfinance network. The Asian microfinance network aspires to enable innovative, appropriate and demand driven financial services for those stagnant at the bottom of the pyramid. Whilst committed to enhancing the quality of life amongst the poor through promoting and facilitating access to sustainable financial services, the key objective will disclaim ‘poverty’. The BWTP seeks to reap sustainability, by embarking on ventures to fuel greater financial inclusion of the poor.

In a bid to alleviate poverty throughout Asia, the BWTP network unravels one of its key initiatives the Asia Microfinance Forum 2010, to be hosted in Sri Lanka from the 12 - 15th of October. Sri Lanka Telecom Mobitel, the National Mobile Service Provider partnered with the Asia Microfinance Forum to acquire its esteemed role as the Silver Sponsor for the Asia Microfinance Forum 2010. "Mobitel takes interest as an active agent by spearheading many initiatives to materialise its vision of infusing development across the nation. The National Mobile Service Provider hopes to stimulate growth through many initiatives conceded in the recent past, thereby thrusting the country towards an economic threshold," a statement by the organisers said.

Sri Lanka was selected as the host destination for the Asia Microfinance Forum 2010, as the post war era assisted in navigating economic resurgence across the country. The economic ambience has reflected significant growth since its docile awakening after the war. The event will span over a three day period and is expected to host a multitude of 600 delegates including leading practitioners, policy makers and other influential personnel who share similar perspectives on Microfinance. The event will display the potential and forward thinking process for the microfinance industry in Asia.

"It is a privilege for Mobitel to be associated as the Silver Sponsor for the Asia Microfinance Forum 2010. The event will assist to penetrate significant rural population and revive an economic revolution through its awareness of financial inclusion. We share a mutual passion in propelling Sri Lanka to greater heights through economic development," said Suren J. Amarasekera, CEO of Sri Lanka Telecom Mobitel.