Women constitute just over half of Sri Lanka’s population and make a sizeable contribution to the national economy. According to the 2014 census, much of this contribution comes in the form of female entrepreneurship, with over 25% of all micro, small and medium enterprises (MSMEs) in Sri Lanka led by women. However, only 6.1% of these women advance to the medium enterprises segment, and only 4.6% progress to the large enterprises sector.
This slow progress of female entrepreneurs is often overlooked by the banking sector, which has traditionally catered to female entrepreneurs exclusively through savings products and related benefits. However, a credit gap of around Rs. 50 billion exists in the female-led MSME segment.
SDB bank, which has a strong MSME focus, has identified this credit gap and introduced a unique initiative to empower female entrepreneurs. Named ‘SDB Uththamavi’, this initiative provides financial assistance to female entrepreneurs to develop their businesses and achieve a level of prosperity.
Expressing her views, SDB bank Head of Business Delrene Seneviratne said, “SDB Uththamavi is a total financial solution which focuses on the advancement of female entrepreneurs. We want to increase the percentage of women in the MSME sector who climb up the ladder and reach the medium and the large sectors, and we understand that this cannot be achieved by savings alone.”
The requirement of collateral is waived in Uththamavi and replaced with two guarantors acceptable to the Bank. The loan also gives the option for women entrepreneurs to draw up to 10% of the loan amount after six months of regular servicing of the loan to meet any of her urgent financial needs.
Seneviratne went on to explain what makes Uththamavi a long term initiative, as opposed to a banking product. “All entrepreneurs go through different cycles in their lives, and for women, this is even more important. Once she has started her business she has to be provided the working capital to expand her business, and somebody needs to guide her on financial management and business management. Once she has the working capital and expands her business, she has to know what to invest in. Uththamavi stands by women throughout this whole process, imparting the requisite knowledge.”
Any woman over 18 years of age is eligible for an Uththamavi MSME loan facility, provided that she owns at least 50% of the business or is the main decision maker of the business. Any female entrepreneur carrying on an ethical business as a sole proprietorship, partnership or a company incorporated under the Companies Act will be entitled for financial assistance up to Rs 1 Million to meet capital expenditure or working capital needs under the loan scheme. The assistance could be availed by women up to the age of 60 years provided the age at maturity of the loan tenor does not exceed 65 years.
Uththamavi also inculcates the saving and thrift habit in Sri Lankan women. The savings facility offers a special slab based interest rate and numerous other perks and benefits which are customised to cater to the aspirations of women at each stage of their lives. The account holders will be entitled to an SDB Dayada Certificate at the birth of a child or a gift voucher worth Rs. 4,000 to purchase clothing/accessories/footwear/cosmetics from any shop provided an average sum of Rs. 100,000 is maintained in the account for a period of 24 months.
Customers can also open an Uththamavi Fixed Deposit with a minimum deposit value of Rs. 100,000 for a fixed tenor of one year. This scheme entitles the deposit holder to a hospitalisation cover for a stipulated period during the tenor of the deposit up to Rs 50,000. SDB bank strongly believes in the powerful impact empowered women can have on society and that Uththamavi will continue to uplift hardworking women to fulfil their ambitions and enjoy sustained prosperity.