Ceylinco Grameen banking reaches out to all poor families

By Nimesha Herath

After completing six successful years and uplifting more than a quarter million of Sri Lanka’s poor, the Ceylinco Grameen Group now wants to tap every single poor household in the country by 2007 through its credit schemes to develop businesses.

“We want to reach every single poor family in the country by 2007. There are four million poor people (about 800,000 families) in Sri Lanka who are earning below Rs.1200, according to the Central Bank. We have already tapped 276,000 families. So we need to reach about another 500,000 families,” G. Victor Ratnayake, the Group’s Deputy Chairman told The Sunday Times FT.

G. Victor Ratnayake, the Group’s Deputy Chairman.

He said that since the company has to depend on sponsorship from Ceylinco Group companies which contribute two percent of their profits, the organization has applied for a license from the Central Bank to become a finance company. He said if this comes through, they will be able to tap all poor households in the next two years.

Ceylinco Grameen, a micro credit scheme offering collateral-free loans to poor women to start or develop their businesses has come a long way in eradicating poverty in the country, and completes six years on May 8.

Mr. Ratnayake said over the past six years they have given loans to people across the country including war affected areas. “We started with a Rs. 2 million-hat collection from the Ceylinco group and just one branch. Today we have given loans worth Rs.5 billion through 78 branches.”

He said this is one bank that goes to the people and caters to their needs. The company’s 276,000 customers are met personally every week through 2200 young educated ‘Grameen’ workers in village centres.

The interaction takes place in community centres where the women’s problems are examined, solved and progress is monitored.

Mr Ratnayake explained that repayments of the loans are collected weekly as this poor segment of society has a tendency to finish what they earn quickly. The loans given without any mortgage, collateral, signature or guarantees are available from Rs.5000 to Rs.150,000.

“When they need to obtain a loan, for example Rs.5000, potential recipients would need to make a presentation at the village centre meeting. If anyone believes that the person is not capable of doing that business, that person would express it at the centre. The centre consist of groups of five people with a leader who support one another in developing the businesses.”

He said if one member of the group is doing poorly and not paying on time, the other members’ loans are affected as well.

“So there is pressure within the group to succeed and this enabled us to achieve success through the programme. For the last six years we have achieved a 100 percent loan recovery rate,” Mr. Ratnayake said. The Group also provides micro credit schemes especially targeted to assist farmers and the fisheries community.

“In Sri Lanka many farmers suffer because they are unable to sell their crops at reasonable prices. Most of them have mortgaged their lands to money lenders. As a first step we help release their lands from the lenders through a long term loan payable in 25 years. On top of that another loan is given to cultivate the lands. The thought of owning their land again motivates these farmers,” he said.

The loan scheme for the farming community starting with Rs.25, 000 is given for a season (3 months). The farmers pay back the loan once the crop is sold.
The company also purchases the harvest, including vegetables, at the right price and sells it to local supermarkets and also exports the vegetables.

Benefactors like Laughfs Super Markets sell Ceylinco Grameen vegetables in their outlets joining in to support this battle against poverty.

Some 530 Grameen members in the fishing community died in the tsunami while another 9980 members were affected. Ceylinco Grameen has written off those loans and has also given these members fresh six percent annual interest loans to recover. The company realising that special attention was necessary to the fisheries community, launched the Grameen Fisheries Programme providing loans starting from Rs.12000.

The Group consisting of 11 companies offers assistance from providing loans to starting a business and also exporting goods of Grameen members.

Mr. Ratnayake says Ceylinco Grameen Health Care (Pvt) Ltd provides basic healthcare facilities in their villages. “We are putting up small units with a doctor, two nurses and a pharmacist. The members are able to obtain daily treatment for Rs.30 or Rs.40 per consultation.”


Job agencies seek to clear their name

Sri Lankan foreign recruitment agencies, tired of being labelled ‘rogues’, ‘corrupt’, ‘unscrupulous’ or ‘uncaring towards migrant workers after sending them abroad’, have jointly launched an aggressive, no-holds-barred campaign to clear their name.

“If it means being critical of the government, then we shall do it. We are just tired of being blamed for everything and not being acknowledged for helping to bring in valuable foreign exchange,” said T.M. Anver Ulumudeen, new President of the Association of Licensed Foreign Employment Agencies (ALFEA).

The 700-strong ALFEA has declared 2006 as the year of image building and fighting for ‘our rights’. “We are determined to clear our name and prove who the real culprits are. Because of the behaviour of a few unlicensed agencies, we all get tarnished with the same brush.

The government should take action – not accuse everyone,” he said in an interview, blaming a few unlicensed agents, the state apparatus and politicians for the plight of migrant workers.

Under this new campaign, ALFEA has became a member of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and has established contacts with UNIFEM (UN Development Fund for Women), ILO and IOM.

“We are also concerned about the safety and sufferings of the migrant worker. In having links with these respected organizations (and sharing information) we want to prove to the world that we have nothing to hide; that we deserve respect and status in a sector that ensures the country has enough foreign exchange,” Mr Anver said.

But women’s groups are not buying this new approach and say there is a long way to go before the agencies get the respect they want. “Most of these women are in dire circumstances because of false hopes by these agencies,” said one activist.

Another activist said the links ALFEA has with these international agencies is just being invited for a workshop in Bangkok where employment agencies from labour sending countries were present and issues relating to the plight of women and migrant workers discussed.

Mr Anwer however says that these are the first steps and the “very reason why we want to progress towards getting respect for what we do.”

Anwer and other ALFEA officials present at the interview accused the government (Sri Lanka Bureau of Foreign Employment – SLBFE) of doing little for a sector that is nearly 30 years old with no national status given unlike other foreign exchange earnings sectors like garments or tea.

“We are labelled as unscrupulous and corrupt but what have governments done in the past? It’s the private sector that has got these jobs. If a BOI investor brings in a few millions, he is treated like a king and gets all tax concessions just to provide 100 jobs.

“We are providing more than 200,000 new jobs every year but we get nothing. A BOI investor takes 51 percent of the money out while we (and migrant workers) bring all the money in,” said Abdul Cader Ifthie, vice president of the association, who also agreed however that there are some unlicensed agents who should be blamed. “But please don’t put everyone in the same basket.”

Another development that annoyed the association recently was a meeting in Dubai of Sri Lankan ambassadors in the Middle East and some Asian countries organized by the SLBFE to discuss the migration trail, problems and future prospects.

At the meeting agents came in for severe criticism.
“Who spends on these tamashas? All these activities come from money that migrant workers and agents have provided to the SLBFE,” another ALFEA official said, adding ironically: “We pay for these bashes and then get bashed up!”

Each worker pays about Rs 8,000 to the bureau in the approval process and at over 200,000 workers leaving per year, the government gets some Rs 16 million annually from services alone from this sector.

Mr Anwer said that under the 1985 Foreign Employment Act the bureau has 19 objectives to fulfill from promotion of employment, safeguarding workers, skills development and investment advice to returnees. “Of this only five objectives have been met while on the others there is no action or just little work.”

Asked about the various trips undertaken by ministers and officials to labour-receiving countries to discuss these issues and sometimes iron out problems, Mr Anwer said: “These are just cosmetic safeguards and solutions. They are not long term solutions.”

He said the bureau has set unrealistic minimum wage rates for housemaids which are not according to market rates in those countries. “When we try to get these rates in those countries, the agents and employers threaten to go to other labour-supplying countries,” he said, adding that ALFEA has repeatedly asked the government to consult it on wage rates without arbitrary increases. “All we ask is for a proper consultative process.”

SLBFE officials asked to comment referred the newspaper to the chairman who was unavailable.


BOI looks at mass transport system

By Duruthu Edirimuni

Investors from India and Malaysia are collaborating in a proposed feasibility study to implement a Mass Rapid Transit System (MRT) in Colombo and will sign a memorandum of understanding (MoU) with the Board of Investment (BOI) for this purpose on Tuesday.

“We have identified the need for a rail-based urban transport system and this firm (joint venture) has come forward to do a feasibility study for an MRT to work out the routes, cost and other details that are involved in this project,” Lakshman R. Watawala, Chairman BOI told The Sunday Times FT, adding that the same group will undertake the construction, once details are finalised.

“There have been others involved before in such studies, but we have more or less confirmed this company,” he said. He declined to name the joint venture but other sources said that it is the NEB Infrastructure in India and Opus International from Malaysia.

The sources said that the MRT is designed to allow passenger travel within or throughout an urban area, usually employing surface, elevated, or underground railway systems or some combination of these.

“Rapid transit systems are generally considered to be mass transit systems, capable of moving large numbers of passengers in a single train.
The large capacities of such systems make them potentially more efficient, in terms of cost and environmental effects, than automobile transportation,” one source said, adding that it will help relieve congestion in the city. He said that a rapid transit train is a number of electrically powered, self-propelled cars.

The source said that the MRT systems offer considerable savings in labour, materials, and energy over private transit systems. Since far fewer operators are required per passenger transported, they can be better trained and more strictly licensed and supervised.

“When utilised to their capacity, mass transit vehicles carry a far higher passenger load per unit of weight and volume than private vehicles. They also offer fuel savings, not only because of the relative reduction in weight transported, but also because they are large enough to carry more efficient engines,” he said.


DI shoes turns profitable after losses

The Ceylon Leather Products Ltd (CLP), marketing the ‘DI’ shoes brand, has made a dramatic turnaround by posting Rs 6 million profits in the year to March from its previous year’s loss of Rs 29 million by increasing exports and discontinuing uneconomical products.

The company is planning to re-enter the Italian market and increase its exports to 40 percent from a current 32 percent.

“We have not audited the accounts as yet but the un-audited profit figure for the year ending March 31, 2006, is Rs 6 million,” Sitendra Senaratne, CEO, CLP said, adding the company plans to increase its exports to Europe and also add to the domestic market share.

“We had a 20 percent increase in exports last year because we got new orders to Europe. The profits went up last year mainly in exports and we want to boost our export base this year in order to post better profits,” he said, adding that the company stopped uneconomical lines of shoes and patterns.

“New designs based on Italian and Indian patterns were introduced to the market last year. We are reducing our debts and hope to increase the domestic market from the 50 percent market size to 60 percent this year,” he said.


JKH will continue to run Coral Gardens

John Keells Holdings, amidst wide speculation in the market that it was selling off its Hikkaduwa Coral Gardens hotel after a failed attempt earlier, said the company plans to run the hotel now.

“About two years ago we put the Coral Gardens up for sale, but did not get any attractive offers and decided to take it off the market. We have not yet found a buyer and now plan to run the property as it is,” Ajith Gunewardene, Joint Managing Director and President Leisure Sector, JKH told The Sunday Times FT.

He said that both JKH’s Coral Gardens and Club Oceanic in Trincomalee will not be re-branded under the group’s Cinnamon or Chaaya brands.

Stockbrokers and industry sources said the company was actively looking at selling Coral Gardens because a lot of investment is needed in upgrading or re-branding it.


Two GoldQuest ‘dealers’ bailed

Two youngsters out of seven people who were arrested promoting the controversial GoldQuest network marketing scheme in Karandeniya in Galle district were given bail recently to enable them to sit the Advance Level examinations, Central Bank authorities said.

“This is the second time we have complained to the police. Last December we made a complaint to the Anuradhapura police station regarding a similar incident,” a Central Bank official said.

He said that the regulator has observed a trend of the GoldQuest scheme being promoted in rural areas.

“Many promoters are very young and the recently arrested promoters are between the ages of 18 and 21 years,” he added.

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