MBSL boosts micro finance to rural communities

Tuesday, 10 April 2012 00:42 -     - {{hitsCtrl.values.hits}}

Merchant Bank, the premier merchant bank in Sri Lanka, has opened its doors to more people in Sri Lanka’s rural areas, providing access to Micro Financing to extend credit facilities, which constitutes rural self employment development alongside extension of credit.

The bank strongly believes that 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. Microfinance not only provides the poor the much needed funds to start a livelihood development program, but also gives them the opportunity to save in small amounts and open doors to many financial services involving them in the big picture of the country’s economic activity.

Over the past year, the Merchant Bank has taken many strides to play a major role in providing access to finance in order to alleviate poverty and to create financial inclusion of underprivileged people in rural and remote areas of the country

MBSL Deputy Manager Micro Finance Charith Wijesuriya was of the opinion that alleviating poverty and improving the living condition of people has been a pressing need in  our country and it is essential for Sri Lanka to empower rural youth and make them micro entrepreneurs for sustainable economic development.

He said, “We also need to not merely provide credit to those who don’t have access to finance, but also educate them to become micro entrepreneurs and support the rural economy. Micro entrepreneurs contribute to maintain social order and sustain the rural economy. Micro-financing currently contributes a mere 2 to 3% to the Sri Lanka’s GDP, which is low in comparison to other countries in the region.”

Therefore the Bank has tailored their micro financing schemes in a manner not only to ensure that it meets the social and economic needs of the country, but also that it continue as an economically sustainable project in the future.

The core objectives of these micro financing schemes introduced by the bank have been to give new orientation to the development of the rural community and encourage participation in rural awakening and regeneration activities by identifying their strengths, weaknesses and resources available and offering financial assistance as appropriate. It also aims to give an opportunity to the thousands of village folk who have hitherto considered banks as places inaccessible to them and offer them the opportunity to obtain financial and other assistance and to assist the local community in getting involved in the economic progress of their villages.

Currently the bank has been involved in many successful Micro Financing projects that include those in the sectors of agriculture, fisheries, tea cultivation, cinnamon cultivation, pepper cultivation, fruit cultivation, cashew cultivation, the dairy industry, pottery and the retail industry.

Speaking of these ventures Wijesuriya said, “We believe that these micro finance schemes have contributed in a major way to alleviate poverty in the country, by empowering the poor with access to capital and making them micro entrepreneurs. We have currently assisted SME’s involved in the fisheries industry in Minneriya, loans to purchase nets, offered loans for SME’s in the Anuradhapura district involved in the coconut plantations to purchase  coconut plants and lent a hand to SME’s in Dambulla to meet cultivation expenses  and working capital for sellers. We were happy to note that all of these businesses had a very fast growing and are today become successful businesses in their respective areas.”

He further elaborated, “Field officers are vital to drive a successful micro finance program in the country. Field officers that support and share the vision of the micro entrepreneur. Passion, patience and commitment are pillars on which micro finance is based on. We have such a team in place that has taken great strides to ensure that our Micro financing services and facilities have been promoted to the relevant sectors of society. Our field officer’s  play a key role by  identifying needy customers,  supervising the progress of projects, ensuring the proper end-use of loan funds and maintaining a close link with village societies.”

The Bank has also taken steps to expand into rural Sri Lanka by setting up centres with the main focus in bringing financial inclusion among the people in the rural parts of the country.