Sri Lankan CB focuses on expansion of Microfinance and livelihoods development in North Province

Microfinance Focus, Feb 21, 2010: In recent months, Central bank of Sri Lanka has initiated several credit schemes applicable throughout the country, In particular, work has commenced on a new Poverty Alleviation Microfinance Project to cover conflict-affected districts, and Approximately 3,000 beneficiary groups with more than 12,000 low-income families have already been organized within the Jaffna peninsula under this project, said Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka. He said at the opening of a new branch office in Jaffna by The Honking & Shanghai Banking Corporation Ltd, Jaffna on 11 February 2010.

He said, “Central Bank has also contributed its mite to these normalization processes. We have, so far, over the past 8 months, granted approvals for the establishment of more than 90 banking outlets in the Northern Province. We have introduced a Special Loan Scheme, also titled “Vadakkin Vasantham” to boost the livelihood development of the people in the North. Under this scheme, an initial sum of Rs. 3,000 million has been appropriated to be disbursed at a concessionary interest rate of 9% per annum to the eligible micro, small and medium scale enterprises, through several Participating Financial Institutions. The repayment period could extend up to 5 years with a grace period of 6 months. I am happy to note that over 9,000 loans amounting to Rs. 1.8 billion have already been registered with the PFIs and disbursements of over Rs 1 billion has taken place”.

Provision of Banking facilities and support for livelihoods up gradation could transform the lives of the people in the Northern Province, he added that “Even during the conflict period, the Northern Province accounted for 10 percent of the paddy production, 40% of Red Onions, 10% of Chillies, 14% of Green Gram and 25% of Ground Nuts. These statistics indicate that there would be many viable income generating activities which could be promoted to upgrade the livelihood of the people, with the assistance of the banking sector.”

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