Micro finance facilitates for East

COLOMBO: The Secretariat for Coordinating the Peace Process (SCOPP) is working with representatives of banks, UN agencies and the business community to address the question of access to credit to facilitate the return to normality in the East after its liberation from the LTTE.

At a meeting convened by SCOPP on Monday access to credit, loan recovery and determining most needy were identified as key impediments to improving livelihood opportunities, especially in agriculture, with the cultivation season about to commence.

Representatives of the Chambers of Commerce (FCCISL), commercial banks and UN agencies participating in the meeting agreed that a humane approach was needed to alleviate difficulties of those in the East affected by the tsunami and the conflict.

In the East, around half the debtors fail to repay, compared to Jaffna and Vavuniya where the recovery rate is over 90 per cent. This has made commercial banks wary of offering credit facilities and other financial products, banking representatives told SCOPP.

The Bank of Ceylon, will be conducting a programme in Batticaloa and Ampara from August 4-5, to sensitize managers to the human side of granting loans. Mohamad Hanifa, ILO Consultant, explained that such initiatives are as important as cash grants. Another problem has been screening applicants.

Sam Stembo of the FCCISL said: “There is a problem about determining the criteria for selecting people to grant loans. We have highlighted this at meetings with the ILO.” This view was echoed by Tom Hockely (UNRCO) .

Timing is another issue. For example, since the planting season begins in September, the demand for credit becomes high. It is crucial that the right people get the right amounts at the right time, it was pointed out.

To deal with all this, representatives of the state banks, acknowledging that their responsibilities and obligations are different from other commercial lending institutions, said that all possibilities to assist farmers before the cultivation season begins will be explored.