NDB promotes livelihood development in cinnamon sector
Monday, 20 January 2014 00:00
Divi Aruna microfinance to be extended to home growers
NDB recently set the foundation to a ‘Grow Cinnamon’ campaign through promoting of microfinance facilities to home growers. This program was inaugurated at a ceremony held in Matara recently, with the disbursement of Divi Aruna microfinance facilities to over 80 selected growers in the area.
The micro loan facilities funded under concessionary rates are expected to encourage small scale growers to remain in the industry. Speaking at the ceremony, I.K. Ruwansiri of the Cinnamon Research Institute of Sri Lanka shared valuable technical insights on effective and efficient methods of cinnamon cultivation for the benefit of the small scale growers that attended the event.
Promoting the national cause of livelihood development at grass root level through sustainable financial inclusion has always been a focal area for NDB. The bank has pioneered many initiatives in this regard truly fulfilling its commitment towards this worthy national cause. With the socio-economic boom subsequent to the cessation of a 30 year civil war, the bank has intensified its growth strategies towards the rural sector which essentially forms the backbone of the country’s economy. Considering that over 80% of Sri Lanka’s population consists of rural population, NDB’s focus and emphasis on the rural economies is both vital and timely.
In continuance of its objectives for financial inclusion, the revolutionary loan scheme titled Divi Aruna (awakening of lives) was commenced in 2010, aimed at developing livelihood for prospective entrepreneurs not within the mainstream of banking. The philosophy for introducing this scheme underlies the thinking that the economic resurgence will generate many growth opportunities - where industries like fisheries, agriculture and infrastructure development are poised to take off, marginalised individuals in the rural sector may lose out, if not given a helping hand at inception.
The primary feature of NDB Divi Aruna scheme is that no collateral is taken as security for the loans. Loan approval is primarily based on the bank’s evaluation of the applicant’s vocation and its confidence in the success of the enterprise.
NDB Divi Aruna loan scheme also aims to promote a savings culture while including the marginalised and the overlooked into the main banking stream. Supplementing the loan scheme therefore, is an investment-based savings scheme where it is mandatory for the borrowers to contribute an additional agreed amount every month towards a savings build up which could be used as collateral for future expansion of business activity.
Although the project initially commenced in the north and east the scheme now extends to the south as well. To date, NDB has financed projects across a gamut of industries, supporting over 600 families through its Divi Aruna loan scheme. Today, Divi Aruna has evolved as an integral part of NDB’s business proposition. It is now being further expanded and streamlined to include targeted market segments such as the small scale agriculturists and dairy farmers who already maintain supplier linkages with industry leaders, registered community based organisations already functioning at grass root level and new organisations formed under the supervision and guidance of NDB.
The expanded product coverage would include micro leasing, micro livelihood loans and financing of community based organisations and/or their members on a selective basis in addition to empowerment and capacity building programs.