Lankan financial institutions not concerned about wellbeing of conflict-affected societies
The flood of financial institutions to Sri Lanka’s conflict-affected areas offering large loans on interest to the poor affected at the grassroots-level has turned the latter into debtors, rather than supporting them to lift their lives off the ground
Dr. D.D. David, General Secretary, Batticaloa YMCA, sharing his experiences involved in service oriented microfinance continuing from even during the height of conflict since 1998, said that after the war a large number of financial institutions have inundated these conflict affected areas and offering credit without concerning the wellbeing or welfare of the grassroots level people.
He made these assertions at a workshop on “Micro Finance as a Tool for Empowering the Conflict affected Communities” sponsored by “Pathfinder” Foundation, held in Colombo last week.
He shared these experiences they encounter when helping desperate people. He said “Some are dead and gone but we continue to make others live on and people like you and I made them to survive with life support – microfinance”.
He said that 80 per cent of the Eastern Province survive on paddy cultivation, but 20 per cent of that land is within the high security zone and those farmers are compelled to abandon their livelihood. Most of the conflict-affected people have not been living in one place and were confronted by two groups – the Sri Lankan Army and the militants. These people were not allowed to have too many things and it was very dangerous for them as they are often suspected by both the army and the militants.
During these crisis times the YMCA launched their programmes of microfinance in 1998. Dr. David said that they were not allowed to bring the savings of the villagers to the Centre. There was rampant malnutrition in these areas and their initial projects were on countering malnutrition. When people did not have money to invest in anything, the YMCA started micro credit programme with 400 vulnerable families and now their clientele has swelled to 2,500 with a Rs. 76 million portfolio.
The micro finance or micro credit system is a mechanism, he said, to be practiced depending on the different communities and the cultures. Their programmes have become viable and successful, he said, adding: “These people now at least get three meals a day, children go to school with three or four exercise books. The tiny huts they live in now have cemented floors and tin sheets on the roofs”.
To those people in desperation during the height of conflict they were offered small loans to cash to boil pittu or string hoppers as income generating activity, Dr. David added. However after the war, an unfortunate situation emerged where many financial institutions have invaded these conflict affected areas – not concerned about the wellbeing or welfare of the people but offer loans on a profit-making basis.
He said that these money lenders lend money at the people’s doorsteps, come back to collect the dues. Those unable to pay would not open the doors but the lender waits ‘until the door is opened’. These lenders are not concerned whether the borrowed money is invested or whether people have benefited.
He said that only the NGOs and other organisations who are concerned about the wellbeing of these poor people stood by them during the hard times and the good time. He said the situation is changed now.
Dr. David said if micro finance is properly executed it could be a mechanism that can ease the plight of the people.
Revealing the findings of a study conducted in conflict-affected areas, Ariyarathne Herath from the Department of Economics and Statistics, Peradeniya University said that the main thrust of the study is to assess the capability of microfinance as a tool of reconciliation through economic activity generation and empowerment in the conflict affected communities in the Northern and Eastern. The focus is on Tamils who are by far the largest group of victims of war.
He said that the North and East are significant producers of food, cash crops, livestock and fish. The major agricultural crops are rice, onion, green chili, potatoes and tobacco. The region accounts for 1/3 of rice production of the country.
Poverty is the condition where people are unable to meet basic needs of food, clothing and shelter. Its main indicator is low income, he said, adding that the poor and the vulnerable are the most affected and their war experience, damage to property and levels of trauma is far greater than those belonging to well-to-do social groups.