Financial Times
Ceylinco's helping hand to the self-employed
By a Staff Correspondent
Victor Ratnayake is no relation
of the famous Sri Lankan singer.
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Makes
a reasonable profit
At Mariage Maheswaran's
home at Mosque lane, Kollupitiya, the living room has a giant rice pan
while on the table lies a row of stainless steel containers with a range
of vegetables and meat.
She prepares a delicious
meal of two/three curries and a fried egg for Rs. 35. "It's not very
profitable but it's not fair to charge anything more than this from neighbours,"
she says while packing a lunch packet for a neighbour. From just five
lunch packets a day, Maheswaran has progressed to 170 packets, about three
years later - all with the help of Ceylinco Grameem loans - and makes
a reasonable profit per day.
She and her husband
plan to purchase the small plot of land and house which they now live
in, after moving from a smaller abode a few months ago.
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But as he strolls through the
maze of tenement houses just behind Prime Minister Ranil Wickremesinghe's Temple
Trees residence at Kollupitiya, a smile here and an adoring voice calling out
"Ah mahattaya, kohomada" coming from a sweaty woman cooking behind a claypot,
shows he could be equally popular.
"They want me to contest local
council elections," the Ceylinco executive laughs as he walks deeper into narrow
alleys with rows of small, attached houses on either side and heads for the homes
of recipients of cheap credit from Ceylinco Grameem Credit Co. Ltd.
Ratnayake, who has lived and
worked in Canada and Australia with his family for at least four years before
quitting for a less-luxurious life back in Sri Lanka, is executive director of
a programme that has a tremendous future in Sri Lanka. Driven by a desire to help
the poor, the Ceylinco group guided by the influence of its chairman Lalith Kotelawela
is making a major difference in the lives of the ordinary people of Sri Lanka.
Take the example of Nadaraja Sumathi. The 31-year old woman was making and selling
just 50 stringhoppers and struggling to make ends meet until Ceylinco Grameen
came to her rescue three years ago.
Launching the micro-finance
scheme from the "wattes" behind Temple Trees, Ceylinco Grameen provided a low-interest
loan of Rs. 5,000 to Sumathi and 400 other recipients with no collateral or security.
That start-up capital to develop her business helped Sumathi who is now selling
2,000 stringhoppers a day and makes a comfortable profit. She has also improved
her business and has advanced up the ladder, making use of a Rs. 75,000 Grameen
loan.
"You don't need to look for
the poor outside Colombo. They are there right in the heart of Kollupitiya which
is a wealthy area in the capital, and elsewhere," notes Ratnayake.
From stringhopper makers, coconut
sellers, toilet cleaners, seamstresses to a woman who runs a welding unit, the
Ceylinco Grameen scheme modelled on the lines of the world famous Grameen Banking
concept in Bangladesh which benefits millions of people there, has enriched the
lives of close to 10,000 families across Sri Lanka including Jaffna and Batticaloa
The private sector - they say
- is profit-motivated. Not the Ceylinco Grameen Co. Ltd. anyway. Here the desire
is to help those who don't have access to credit, let alone walk into banks -
many just a stone's throw from the Mosque Lane "wattes" at Kollupitiya.
The Ceylinco micro-finance
scheme offers loans starting from Rs. 5,000 and Rs. 10,000 upto Rs 100,000 ...
all on very, low interest, no collateral or security basis. "When a recipient
completes the payment of the first loan, then she is entitled to a second loan
of Rs. 10,000 and so on upto Rs. 100,000. At that point, they have built up their
business and have sufficient collateral to take bigger loans from a commercial
bank," Ratnayake added.
"This is the point where we
have helped them grow out of abject poverty towards a more sustainable business
and a chance to grow further."
The programme was born in 1996
just after Ceylinco House in Fort was badly damaged in the Central Bank bomb blast.
Kotelawela was injured in that blast and while recuperating in hospital, happened
to come across a book on banking for the poor authored by Professor Mohamed Yunus,
architect of the Grameen Banking concept in Bangladesh.
Impressed by this poverty-alleviation
scheme, Kotelawela - who always had this desire to help small businesses grow
- sent two of his senior executives to Bangladesh including Ratnayake to study
it.
"It was an impressive scheme
but we found some concepts had to be altered to suit local needs like confining
it to small loans aimed at uplifting the poor," Ratnayake said.
Selecting a target group was
a problem because there was no proper definition of poverty. That in fact has
led Ceylinco to undertake a study of 400 households to define the poverty line.
The Kollupitiya programme started
with 100 women and 60 men but the men were soon moved out of the programme because
of alcoholism and their inability to do business. Ceylinco decided to concentrate
on a programme benefiting women because they were found to be more responsible,
hardworking and more committed to the family than the man in the house.
The only qualification to be
a member of this scheme is that recipients are poor, according to a Ceylinco Grameen
statement, adding "we train and guide them to develop their own small business".
The programme has worked much
better than normal commercial banking loan schemes with the repayment rates being
more than 100 percent. "The repayment rate is amazing. The recipients are more
responsible and payments are made on time. They are a very disciplined lot," Ratnayake
added.
The company has disbursed more
than Rs. 90 million to some 10,000 recipients. There is also a sponsor-a-family
scheme, which has attracted wide public support.
"The public response is tremendous,"
said Raj Dassanayake, a project manager in charge of raising donations. H.K. Dharmadasa,
popularly known as the Nawaloka Mudalali, was so moved by the success of the programme
that he has offered a branch office at Peliyagoda at a cost of Rs. 3 million.
Another philanthropist has
agreed to provide a building and launch a branch office in the central region,
Dissanayake said, adding that the company was hoping to raise more donations to
sustain the programme.
There have been many people
who have sponsored a family through a contribution of Rs. 5,000.
Ceylinco Grameen's staff of
110 officers working out of 14 branches come from essentially lower and middle
income groups who themselves have struggled through the free education system.
There have been peons who have gone up the ladder to be branch managers. The company's
main office at Kirulapona is sparsely furnished and Ratnayake's room is always
open to his staff. Staffers walk in and out of his room at all times.
Recipients are also covered
by an insurance scheme, accident, medical and death. In case of death, the balance
repayment of the loan is covered by insurance and the bereaved family is spared
the worry of having to repay a loan. "There is no bottom line ... there is no
agenda from the Ceylinco group in this scheme. We don't benefit from the sale
of any of our other services," Ratnayake said, adding that the micro finance scheme
is guided by the need to help small businesses.
At the Pittigala temple in
the Malabe electorate, about 50 women gather for the weekly meeting of Grameen
recipients in the areas.
Ceylinco Grameen officers visit
all the recipients once a week at their homes - in addition to the meeting in
a community centre - and find out how they are faring in their businesses. Practical
problems are taken care of - as far as possible - and suggestions offered on improving
the business.
Kamal Priyanga, a young branch
manager attached to the city office, addressing the Malabe group asks them why
there are some empty seats. He urges the women to come to the meeting on time
since he and two other executives have to visit other centres.
These meetings are held to
collect loan payments which are made on a weekly basis in addition to discussing
other matters.
Discipline is strict and recipients
have to inform by letter if they are absent and why. Invariably attendance is
good and when some women get late to attend the meeting, they are criticised by
other recipients.
Apart from helping the rural
and urban poor, the programme has also cut through high-interest charging traditional
money lenders and village loan sharks.
Helped solve housing
problem
Winnifred Weerasinghe,
45 years, gave up teaching due to health problems, and started off being self-employed.
It was a struggle at the beginning but with the help of a Ceylinco Grameem loan
she was able to purchase a Singer sewing machine. After years of struggle and
living in a small hut, the former teacher has progressed in her sewing business
- she sells clothes to a popular street market at Maharagama - and has also
built a house with a proper roof. "I am able to stand on my own because
of mahathayas like this," she said, choked with emotion, while pointing
to Ratnayake.
Freed from ruthless money
lenders
Warnakulasuriya Anulawathie, 33 years, was forced to borrow small sums
from the local money lender in her village near Malabe at a high interest rate
of 20% monthly for a small business that she was involved in. "There was
no support from anyone until Ceylinco came in," she said adding that she
has advanced to the Rs. 40,000 loan stage and hires many more people at her
workshop where she makes aluminium rallings for staircases and gates.
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