DEVELOPMENT-SRI LANKA: Small Loans Set Poor Up For Life

By Feizal Samath Reprint | | Print |

Feizal Samath

HANGURANKETA, Sri Lanka, Aug 6 1998 (IPS) - A cow bought with money from a credit and savings scheme has changed Gamagedera Bisomenike’s life. Recently she repaired her dilapidated mud hut and bought some furniture with money saved from the daily sale of milk.

The loan is from the Hanguranketa Rural Support Foundation (HRSF), which also helps poor people set up income generating activities and links community and village groups in Sri Lanka’s central hills with government and other funding agencies.

Though Sri Lanka has far better systems of welfare than its neighbours in South Asia, the majority of people in the hill region, where there are large plantations of tea and rubber, are very poor farm workers.

Take Thilakawathi for instance. A labourer, she treks up and down steep slopes in Sri Lanka’s mountainous central region several times a day, lugging loads on her head from the fields and shops lower down.

Her home is one of a cluster of huts, perched dizzily on top of a mountain, about 3 km from the nearest road head, and as far from the nearest shop, pharmacy and school.

Now that the Foundation has started saving and credit schemes in her area, Thilakawathi hopes to borrow money and take the advise of the foundation, which is financed and assisted by the United Nations Development Fund (UNDP), to embark on either vegetable farming or poultry.

Like the Foundation in Hanguranketa, the Kotmale Rural Development Foundation (KRDF), based in the nearby town of Kotmale in Nuwara Eliya, is also saving money and extending loans to the poor and the needy.

Dingiri Banda, who lives in Kotmale town and was formerly employed with the government, decided to go into the egg business. With a small starting up loan of 13,000 rupees (250 dollars), he has set up a profitable business.

Perhaps the most motivated is 26-year old Lohitha Darada Kumbura, a final year student of archaeology at Sri Lanka’s University of Peradeniya.

Kubura had a small poultry farm and was selling fresh farm eggs but found the cost of chicken feed astronomical; he struggled to pay for his university education and feed his young son and wife. Nowwith help from the programme, Kumbura and four others are producing their own chicken feed at less than half the cost and marketing it to 50 other poultry owners in the area.

“The UNDP programme has helped many of us rise from abject poverty levels,” said Bisomenike, the proud owner of a hybrid Jersey cow.

The Hanguranketa Rural Support Foundation has more than 3,000 members in 126 villages. So far, loans totalling some 288,000 rupees (5,760 dollars) have been distributed at an interest rate of 2 percent per annum.

“We were helpless, powerless people but after the UNDP came into town and showed the way in building development structures and developing our lives, things have brightened up,” said Bisomenike.

The UNDP assistance is being channeled through its South Asian Poverty Alleviation Programme (SAPAP), which is trying to take poor people out of the poverty trap.

“Our programme is basically one of social mobilisation,” said Somasiri Dayaratne, national coordinator of SAPAP, after a gruelling climb up a slush-splattered track to Thilakawathi’s mountain village of Rathyaya.

At Rathyaya, UNDP-funds and technical help have been sought for the construction of a reservoir and network of channels to irrigate rain-fed rice and vegetable terraces on the lower reaches of the slope.

Thumpalagedera Piyasinghe, a rice farmer and village elder, said villagers are volunteering their labour, working in groups on the construction which is likely to be completed within three months.

“Together, we will build this reservoir and irrigation system and improve the life of this community,” SAPAP coordinator Dayaratne promised, adding that the next project is for building a road to the village.

An estimated 30 percent of Sri Lanka’s 18 million people are poor and live below the poverty line. SAPAP is only one of the several programmes for poverty alleviation in the country.

Dayaratne says SAPAP covers nearly 80,000 families in Hanguranketa and Kotmale towns in the Nuwara Eliya district, 180- km east of Colombo, and this year has a budget of 460,000 dollars. The project is a direct outcome of a poverty strategy adopted six years ago by the South Asian Association for Regional Cooperation (SAARC) which groups the region’s seven countries.

UNDP officials said Nuwara Eliya had been selected because it is one of the most impoverished regions in Sri Lanka. The programme launched in end-1996 has aided poor peasant farmers, unemployed youth, rural craftspersons and women’s groups and steered them on the road to self employment and financial independence.