Berendina: Fighting poverty differently
In 1992, a Dutch gentleman walked into my room at SEEDS and wanted my help to spend Rs.1 million on a village in Yatiytantota. He was from Berendina Stichting (BS), a trust started by Berendina Borst, who used to visit Sri Lanka prior to her death in 1991 and assist villagers in Garagoda. I sought the assistance of Anura Attapathu and Jagath Godakanda who were in SEEDS staff as I was busy with overseas assignments. This was the first lesson – to have deputies who are better than yourself.
We recruited an A Level qualified youth who was straight from school. He was brilliant. Second lesson – as far as possible, take staff who have not worked anywhere! We recruited a manager as we had a long term plan and did not worry about short term overheads. Third lesson – with growth, overheads become marginal though initially high and may be considered a development cost. Today Berendina has four NGO’s which are guarantee companies and the organisation’s current budget is over Rs.2.5 billion with a staff of 366.
Filling the gaps
We began giving grants to villagers for livelihood support. Within a year we knew that this approach would not make the best impact from the money entrusted. With difficulty, we convinced BS that it was more beneficial to give loans instead of grants. As we got 100 per cent repayment we pushed them to agree that we charge 5 per cent p.a. interest which has risen to the current rate of 13 per cent p.a. We also build small houses/ latrines in rural villages. We started running medical camps on estates as accessing a qualified doctor was difficult.
Plantations
We believe private companies do more for poverty alleviation than NGOs. Hence we worked in a partnership mode, initially by winning confidence of the managers and later the CEO of the plantation companies. The last two years saw Watawala Plantations taking over Rs. 20 million in loans from Berendina for re-roofing of line rooms as the plantation’s welfare budget was inadequate to meet this need. This reflects the concern of some companies towards the welfare of their workers despite the losses tea was making. We moved to creating water systems for workers in partnership with Palm Foundation, which is stronger in social mobilisation and having a separate engineering division.
Water user groups were formed to assist in construction and contribute monthly amounts for maintenance and the respective companies were persuaded to contribute 25 per cent of the cost. We created 151 elders clubs reaching over 6000 elders. We encouraged them to dance, sing, learn laughing and breathing Yoga. We utilised the services of the Alzheimer’s Foundation to raise their awareness of this disease, persuaded companies to recruit elders work gangs to work half a day, develop savings habit and give the clubs small grants to use as loans. We are helping the clubs to be self-reliant.
We also partnered USAID, plantation companies and the EPF department to teach them how to receive EPF funds without having to resort to middle- men. We partnered another company from the Dilmah Group to train young girls as ‘Kanganis’. We use the best doctors to upgrade the skills of plantation medical officers and have done over 40 training courses. Most importantly, we were the first agency ever to provide micro finance loans to estate workers and that too through the planter- managed estate co-operatives which also get a small percentage for their welfare work.
Sub-contracting for private firms
Very early on Berendina realised that poverty cannot be eradicated by self-employment alone and employment creation was important. We formed youth into a co-operative assisted by Berendina, which entered into partnership with private companies to provide work. The companies gave the designs, inputs and training for products for youth to do the production. Berendina helped by providing rent, electricity, coordination and in some cases, quality control. Over 24 export companies partnered us in this project. The products/work ranged from computer parts, gem cutting, artificial flowers, knitting sweaters to Iceland and presently making car seat belts for Europe. Over 2000 youth have worked with us over time.
Tea and fruit crops
Berendina realised around 2009, that there is a segment of the population that is unwilling to embark upon self-employment as they are not entrepreneurially inclined. They are day labour and doesn’t get adequate work. In Kegalle, we encouraged them to plant tea in the small plots of land they have and in Anuradapura we helped them to plant fruit trees. Both ‘on grant basis’ and training were provided using agriculture/tea extension staff where required. Such long term setting up of income generating activities is not considered often enough by many NGOs. Berendina, on the other hand, has assisted over 4000 families on this basis and supported and monitored such projects for five years.
Micro finance
The writer was the pioneer in commencing modern best practice micro finance in Sri Lanka in starting SEEDS in 1986. Berendina just improved on it. Berendina currently provides loans at an average rate of 13 per cent interest. This is the lowest by any private sector micro finance provider.
Yet, despite having over Rs.1 billion in outstanding loans and not been able to take savings, Berendina makes a profit, which is used for poverty alleviation work. The contributing factors for this success are that Berendina has the best incentive scheme by any provider, it has the best ratio of clients per loan officer in any MFI in the island at an average of 750 (International Standard 400) and has a (PAR) below 1 per cent, (repayment rate over 99 per cent) and a loan is processed within seven days.
Berendina is the only agency which carries out a serious demand driven credit plus programme. Every client is given an opportunity to follow training in any aspect of business management, in technology (agriculture etc) and in soft skills (attitude change etc). A coupon of Rs.1000 is given with the loan and is paid for to be used for training. In case a client does not need training the money is refunded at the end of the loan period. Further, all clients have health/ death insurance. Berendina forms a cluster of 30 members who meet once a month. Currently Berendina has a client base of 83,000 with 2760 cluster leaders of whom over 95 per cent are women. Their role is to ensure group members attend meetings once a month and they repay their loans in time. This is a serious leadership role that empowers women further, in addition to being clients who have developed their business.
Berendina believes poverty and pain is acute and it needs to be addressed in a large scale. This is why directors gave houses as collateral to take loans enabling growth of micro finance clients from around 30,000 to present 83,000. This is why Berendina started crowd funding to make not just 1000 poor bright youth have a future but 10,000 by 2020. We have linked over 16,000 youth with jobs in over 300 companies, given over 8000 VT scholarships, given 2250 bright children scholarships and given career counselling to over 100,000 youth. School bags have been given to over 10,000 estate children. We work with 6000 elders in 151 clubs. We have assisted with lenses for 2300 cataract operations and given over 14300 spectacles. Berendina has constructed over 30 water projects on estates, benefitting over 100,000 people in plantations. 4300 families were given livelihood support with grants; 1860 destitute families were given a monthly allowance and 583 houses constructed/repaired while 83,000 families currently are receiving micro finance and per year over 30,000 of them are given training.
Precious resource
Some companies even advertise saying they would give preference to staff from BMI! Every year a group of staff is sent overseas for training or study tours. Staff satisfaction surveys are carried out and issues raised by them, addressed. One major issue was that all staff on contract basis wanted permanency. The management obliged. There is zero tolerance of corruption. A manager who stole Rs.900,000 was taken to courts and compelled to return the funds. Another manager who made undue advances to female staff was asked to go despite brilliance in his work. A female who applied for a General Manager’s position and was selected, phoned 10 days after the interview saying that she was pregnant and inquired as to whether she was still wanted. The answer was yes.
Overheads
A major complaint that the public has against NGOs is that their overheads are high. In the case of Berendina we did not have a Colombo office from 1992 to 2007. We did not have a single vehicle from 1992 to 2007. In 2007 we first got a van and later the fleet grew but the maximum price paid for a vehicle is less than Rs.5 million.
Berendina to Give2Lanka
In August 2015, Berendina launched its flagship programme, which is educational/employment support for bright (minimum 6 credits with Maths in one sitting O Level) and poor (Samurdhi or per person income below Rs.5000) children. They are given educational support of up to Rs.1500 per month after the O Level examination and career counselling after the A Level. Those who qualify to enter the university continue to get the monthly allowance. Those who want to venture into other professions are given an allowance of up to Rs. 50,000 for 30+ courses such as AAT and Nursing which lead to stable employment. Those who are desperately in need of an income are linked to entry level jobs in 300+ companies that are connected to Berendina.
Berendina granted 1000 “bright and poor” scholarships in 2015 with funds received from Holland. It then started raising funds from the public with the aim of providing 10,000 such children with scholarships by 2020. BS supported the creation of Give2Lanka (Gte) Ltd for this purpose. The writer, appeals to the public and corporations to support this cause by funding this programme through Give2Lanka. This may be done by identifying with us as corporate CSR partners, and allowing voluntary payroll deductions to be made in our favour. Give2Lanka (www.give2lanka.org) commenced operations in March 2016 and has so far included eight other causes for support besides the “Bright Children’s programme”.
This was deemed necessary as international donors stopped or reducing funding for good NGOs stating that we are a mid-income nation. The other causes Give2Lanka support include houses for destitute families (MCDF), cots for kids in crèches in estates (Palm Foundation), bicycles for school children from vulnerable families in Jaffna (Hudec), income and activity for elders (Helpage), water for the poor (Palm Foundation East), flood rehabilitation (Sevanatha), counselling for abused children (Peace) and assistance to the poor Royal boy in a coma (Royal 57 Group).