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Case Study On Samurdhi Bank

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A Study on “SAMURDHI MICRO LOANS” and Its Impact on Alleviating Rural Poverty

A case study based on “Samurdhi Micro Loans” in Biyagama divisional Secretary Area in Gampaha district

1. Introduction
Poverty is a big problem in developing countries. Sri Lanka as a middle income country is also facing the problem of poverty. A lot of families in Sri Lanka are being covered under the safety net programs funded by the government of Sri Lanka in terms of income transfer (food and income subsidy), nutrition package for pregnant and lactating mothers and milk feeding subsidy for children between two and five years old. Therefore, one of the main responsibilities of the government of Sri Lanka is to eradicate poverty from our mother land.
"Samurdhi"
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The samurdhi banks were launched in order to provide financial facilities to the poor and to empower the small scale entrepreneurs. It is the responsibility of samurdhi officers to converse the lives of the poor in to business based high percentage self financing life. Currently there are 4 samurdhi banks representing 1022 bank societies in Biyagama…show more content…
Typically, they have fixed workshop and capital investments but the character is still small and most of the production is meant for local markets. It is important to note that the number of employees is not the only measure of the size of micro credit enterprises. Other factors such as output, sales and asset levels may be equally appropriate indicators of the size of the firm’s operation. Currently, most of the loans to micro-entrepreneurs are provided primarily through the government, foreign aid assisted non-governmental agencies or informal money lenders. Financial institutions must recover their cost of servicing loans by interest charges and they must be confident borrower’s intent ability to repay. Financial institutions are also hampered by lack of formal collateral. This means the standard criteria used by the financial institutions are inappropriate for micro enterprise lending. To over-come this problem the government established a channel to direct their own programs with the objective of achieving social welfare and micro enterprise development. The Samurdhi Development Credit Scheme developed by the Ministry of Nation Building in Sri Lanka. This scheme was intended to serve the rural community through village level task forces called “Samurdhi Task Forces” which operated as a social intermediary. The task force used its members called “Samurdhi Development Officer” to select recipients of the
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