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Stories of Wealthy Families

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Foreword from the Country Director

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lan has been working with poor people and disadvantaged communities since 1937 when the organization was founded. At that time the problem was not poverty, but armed conflict between different factions in Spain’s civil war. Then, as now, the people that suffer most from poverty or conflict are children, their families and communities. Thankfully Sri Lanka has developed a lot in the past decade and conditions for all Sri Lankans have improved. Conflict is in the past and Sri Lanka is recognized as one of the, if not the, most dynamic countries in South Asia / Southeast Asia. One thing that we all acknowledge is that people don’t choose to be poor. People do not want to live on the charity of others. People; fathers and mothers; brothers and sisters, families acknowledge their roles and responsibilities and want to carry them out. In spite of all the achievements that Sri Lanka has seen over the past decade there continue to be families that suffer from poverty, families that have not had a chance to benefit from the prosperity of the country. They want to benefit and are willing to work for it. Plan has been working with such families in Sri Lanka since 1981 when it started work in the country. Since a small beginning in Kandy, the organization

Stories of Wealthy Families

has spread its work from Hambantota in the south to Anuradhapura in the north, from Colombo in the west to Batticaloa in the east. During this time, in these very different places Plan has worked with children, families and communities, local governments and local civil society groups, the national government and NGOs; national and international. Five programmes have been developed: learning, health, household economic security, protection and disaster preparedness and management. Since 1981, in the geographical areas mentioned, with the people and organizations, and in the five areas of intervention, one clear message comes out, especially from women: we want to provide for ourselves: our children, families and communities. We want to make our nation strong. They say, “give us the training and tools, and we will do the rest”. One, if not the tool asked for, is access to credit and training in finance management. Poor people, women in particular do a lot with very little to support their children and families. If they can get a little money and learn how to make it work, they care for their family’s educations and health needs, and become very valuable members of their communities. In recognition of this Plan has worked with local partners, families and communities to build and strengthen a system that gets necessary financial support; training and access to credit to the poor, people that need it most. Plan has done with local partners, economic opportunity groups, and individuals. Plan is presenting here a collection of stories and case studies of individuals and families that have taken the opportunity, and risk, of working with different organizations to make a better life for them, their families and communities. These stories are inspiring and help us understand more about challenges people face living in poverty, and how they work to get out of it.

Edward T. (Ned) Espey August 2013 03


Overview Ensuring wellbeing of the family

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lan’s programme on Household Economic Security aims to build the capacity of families to meet their basic needs at all times by making available financial resources, financial and economic opportunities and necessary financial competencies. Specifically, the programme endeavors to increase the capacity of civil society organizations to empower women in poor and vulnerable families to raise disposable income, improve food security, and reduce family’s vulnerability to economic shifts, economic risks and frequent financial stresses. The programme looks at strengthening civil society organizations to provide inclusive and client responsive financial services to poor families, especially women in Plan operating areas as well as all over the country by providing technical guidance to the microfinance sector via a national network of microfinance. Under the social performance management strategy, the programme aims at improving financial competencies, life skills, social skills and entrepreneur skills of women, men, girls and boys to manage their existing resources while guiding them towards accumulation of assets and wealth as individuals, families and communities. As part of strengthening the capacity of the service providers, Plan Sri Lanka engages in developing the technical and institutional capacity of microfinance Institutions (MFIs) to implement povertyfocused models in the neediest communities in a more responsible and accountable manner. Plan mainly develops institutional capacities of MFIs to roll out three major interventions;

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• Providing financial services to poor families mainly women via Economic Empowerment Groups (EEGs) • Improving effectiveness of community decision making processes through Financial Competencies and Life skills Improvement for Rapid Socio-economic Transformation (FiCLSI 4 RSeT) engaging men, women, girls and boys. • Promoting Women Economic Leadership through Livelihood Improvement and Entrepreneurship Development (WELL) At present, Plan partners with three key players in the microfinance sector - Sarvodaya Economic Enterprises Development Services (SEEDS) since 2006, Berendina Microfinance Institute (BMI) since 2012 and with Lanka Microfinance Practitioner’s Association (LMFPA) since 2006. In 2013, 708 Economic Empowerment Groups (EEGs) have been mobilised through projects in Moneragala, Kandy and Polpithigama under Plan-SEEDS partnership. The total membership stands at 7,000 with 90% of women members. Savings mobilized by the EEGs account for approximately 41 million rupees (USD 329,659), which is also circulated among EEG members as emergency and small loans. It was estimated that more than 18,000 girls and 12,000 boys have been directly and indirectly benefited from the services. (Financial Performances Analysis, SEEDS, June 2013). Plan Sri Lanka


Plan also developed a new partnership with Berendina Microfinance Institute (BMI) in May 2012 to support projects in Anuradhapura District. Through the partnership, 308 credit clusters were supported, with 8,700 members including 6,000 women. Financial services provided by all projects have enabled poor and un-bankable women to increase and diversify their income, build human, social and economic assets, and improve their lives. As a result, poor families were able to invest in building a wide range of assets for them and their families such as better nutrition, improved health, access to schooling, a better roof on their homes, and expansion of their small businesses. The ability of women to borrow, save, and earn income has enhanced their confidence to better confront systemic gender inequities in their society. “Wealthy Family” through Financial Competency and Life Skills Improvement for Rapid Socio-economic Transformation (FiCLSI 4 RSeT) “Financial Discipline is key to success” is the main theme of the FiCLSI 4 RSeT approach. In 2012, Plan Sri Lanka Introduced a programme called Financial Competency and Life Skills Improvement for Rapid Socio-economic Transformation (FiCLSI 4 RSeT) as the Social Performance Strategy (SPM) of the financial services programme. FiCLSI 4 RSeT aims at increasing wealth of individuals, families and communities via improving financial competencies and life skills.

Stories of Wealthy Families

Lanka Microfinance Practitioners’ Association (LMFPA) Lanka Microfinance Practitioners Association (LMFPA) was established in 2006 with the support of Plan Sri Lanka and GiZ ProMiS as the national forum for microfinance practitioners. Plan works with LMFPA to make country’s microfinance sector more responsible and accountable for its services via promoting social performance and advocating and lobbying with government authorities for establishing conducive legal and policy environment. One key achievement for the sector in the recent years has been the introduction of the Promoting Progress out of Poverty Index (PPI) in 2011 as a poverty measurement tool towards making MFIs more accountable towards reaching and serving the poor. In 2013, Plan was able to introduce the Financial Competencies and Life skills Improvement for Rapid Socio- economic Transformation programme as the social performance application for the microfinance sector. Twenty eight senior managers of 17 MFIs were trained in a national level Training of Trainers workshop which resulted in 14 MFIs institutionalizing FiCLSI 4 RSeT as their social performance management strategy. Plan also worked with the LMFPA to create a dialogue between microfinance practitioners and regulators on the Finance Business Act through organizing public forums.

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K

arunawathi and Sumathipala are not the typical village couple. They have overcome exceptional odds to be what they are today. Karunawathi has been afflicted with polio since she was five years. She cannot get about as much as she would like to and is on a wheel chair. She has never gone to school but says that she can read and write.

She has made use of the training opportunities provided to her EEG members on business development, financial literacy and household money management to improve her income and maintain healthy household finances. Especially for someone like Karunawarhi whose without formal education, these training programmes have help instil a sense of clarity and meaning to her work.

Karunawathi married Sumathipala when they were both 40 years. Although living with lots of financial difficulties, they have their own house. Sumathipala is engaged in agriculture and Karunawathi supports him whichever way she can. Though the couple does not have their own children they have adopted a son.

Since joining the microfinance programme, Karunawathie’s monthly family income has risen by nearly Rs. 2,500/- (US$ 20 per month). Since then, Karunawathie has become an active member of her community, engaging in productive work, recognized by her peers. Although the increase of her income may appear small, when considering the massive challenges that Karunwathi had to overcome with her disability, age (she is now 55 years old and is generally older than the average EEG member) and lack of education, it is indeed a great achievement.

Karunawathi got interested to join the microfinance programme, when she was approached by a volunteer in 2010. She is now a member of the Sarani Economic Empowerment Group. The name Sarani means “to help�. The group has helped Karunawathi to become a productive member of her community despite her disability. Her participation in the weekly meetings of the economic group gives Karunawathi a sense of belonging and kinship with her peers. She is aware that Plan has been supporting water, sanitation and education projects for her community. That has given her lots of confidence to work with the EEG. After joining the group, Karunawathi obtained a loan of Rs.15,000/(US$120) and used for cultivating vegetables. On successfully completing her first loan, Karunawathie took a loan twice as much as her first loan which she invested in growing pomegranate, and the year after to cultivate cashew and corn. Karunawathi emphasizes that she only obtains loan amounts that she really needs as she is mindful of the fact that the loan has to be repaid. With her assiduousness, the family has managed to expand the cultivated land extent so much that it has doubled from the initial land extent that was cultivated. 06

Small changes are like drops in a bucket, it is by collecting these small drops that the bucket becomes full. Similarly Karunawathi has made small improvements in her life and her family. Earlier she used to save only Rs.100/- (US$ .80 cents) every quarter, now this has increased to Rs.300/- (US$ 2.4), almost 200% increase in savings. Despite the obstacles meted out to her by life, Karunwathi has become more astute than others. She has never borrowed money from moneylenders or other informal financial sources. She only takes loans from the EEG, and this too in amounts that she is sure to pay back. Karunawathi values the support of Plan and SEEDS staff and their guidance and regular visits. She says that the staff looked after their needs and provided invaluable guidance to get them out of poverty. She also appreciates the financial support provided through the microfinance schemes. She will continue to use these services to Plan Sri Lanka


Overcoming exceptional odds The story of Karunawathi and Sumathipala

obtain technical training. Karunawathi suggests that they should develop a pension scheme for those like her. She says that due to her physical disability she will not be able to engage in agriculture for long, so she needs to think of an alternative form of income such as Stories of Wealthy Families

a small retail outlet. Karunawathi still does not have pipe water or proper sanitation facilities. She has to bring water from the river to fulfil her daily needs. But despite these challenges she is motivated and determined to overcome the odds and make a success of her life. 07


Guiding success through empowerment The story of Jayanthi Mala

“No one else guided me to success before,” is the first reaction of N. G. Jayanthi Mala from Palle Deltota -Doluwa, Kandy as she looks up from the garment that she’s sewing.

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ayanthi Mala is in her 40s, married to Siril – a mason cum carpenter. Both of them were born and bred in the same village. They have three children. Their elder son is married and no longer lives with them. Jayanthi Mala was educated up to Grade 10, and worked for two years in a garment factory in Colombo before her marriage. After getting married she worked for another two years at a factory in Gurukelle in Kandy. She had learnt dress-making from her sister when she was a young girl. She used these skills efficiently even though she did not have a formal certificate of

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training for the dress making trade. Jayanthi Mala also worked as a sales representative for an insurance company from 2011 to 2012 – which shows her versatility. Being a member of the women’s development society and death donation society in her village, Jayanthi Mala says that she has been interested in social service activities since she was a young girl. Therefore when she was introduced to Plan Sri Lanka’s household economic security programme, implemented by SEEDS, she had no hesitation in joining an economic empowerment group. “It’s a new experience for me. Plan

Plan Sri Lanka


Sri Lanka was not new to me, because Plan sponsored my family and especially my daughter’s education” says Jayanthi Mala.

Jayanthi says that the ripple effects from these programmes saw her growing into a leader in her community.

Through the programme, she received trainings organized by Plan including maternal and child health, financial education, nutrition, sanitation, income generation, village savings and loans groups. Jayanthi Mala attributes her success and personal development to these trainings.

Jayanthi says that the health and hygiene trainings provided by Plan through the government divisional secretariat office in 2008 has improved her knowledge on health and hygienic practices, which is important for her personal life as well. She also participated in an exposure visit to Kurunegala in 2008, with Plan Sri Lanka staff. “I visited some successful development projects, which was a good motivation for me. I saw how women from different parts of the country are working hard to give better life for their families and children” she says. Jayanthi is keen to receive some more training on planning, maintenance, and documentation of the projects.

“I participated in group activities such as Shramadhana (voluntary labour) programmes for addressing needs in the village and participated at the Pola (village fair) and sold vegetables from our own garden and also sold the dresses which I sewed,” she adds. The financial support she obtained through the project is a great strength for aspiring entrepreneurs like her, she says. “This is because we could obtain many loans for our development which made us financially strong to face the future.” She obtained Rs.25,000/- (US$ 200) as a microfinance loan in the first quarter of 2009 from SEEDS and invested it in her husband’s carpentry business. She also bought a new Beeralu machine (wooden unit for handweaving lace) with this loan. In the fourth quarter of the same year Jayanthi Mala obtained Rs.50,000 (US$ 400) and started building her house. Her next microfinance loan was in 2012 where she obtained Rs.100,000/(US$ 800) of which she spent 60% for the renovation of her house and invested 40% of the loan in her dressmaking shop. These microfinance services resulted in a permanent shelter for Jayanthi and her family, while helping her to establish their grocery shop and dress making enterprise as self-employment avenues. She reiterates that through this experience she learnt that it is easy to obtain a loan through formal financial service providers at reasonable rates of interest “It was a learning experience which I will cherish,” she says. The empowerment strategies implemented by Plan and SEEDS through the economic empowerment group ranged from women entrepreneurship development, increased financial independence of women, leadership training and women’s increased participation in financial decision making.

Stories of Wealthy Families

“At a glance, the programme has positively impacted living standards of my family. We have built a permanent house, established self employment activities and improved our children’s education,” she says, adding that she is satisfied with her achievements so far. Jayanthi now earns six times more to what she earned from her dress making business previously. Before this programme she was earning only Rs.5,000/- (US$ 40) per month while now she makes nearly Rs.30,000/(US$ 240) per month. Income from her husband’s carpentry cum masonry business is also increasing. As a result their profits from business are nearly Rs. 12,500 (US$ 100) per month. Jayanthi needs more loans for what she has in mind for the future. She is planning a business to produce cement blocks. It is a well thought out plan, she says since it is complementary to her husband’s job. She needs Rs.100,000/- (US$ 800) for this proposed work. She will also require technical training to support her new venture. Judging by experience there is no doubt she will make it. The guidance and support provided by Plan and SEEDS has supported rural women such as Jayanthi Mala, who lived in poverty to become self-reliant businesswomen. She is determined to use her experience and successes to build a strong and bright future for her family.

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Developing entrepreneurship among rural women The story of Priyanka Kumari

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he success of a business start up depends not only on the entrepreneurial competencies of the business owner but also on external factors; primary among these is the support services available. Priyanka has had all the support she needs from Plan and Berendina, Plan’s microfinance partner as well as from her family and her community. Priyanka Kumari, 42 years old, married in her teens, had her first child when she was 19. She has two grown up daughters now. Priyanka’s husband - Tissa works as a carpenter and the only breadwinner to the family. In addition to carpentry, Tissa is engaged in cultivating crops to supplement their family income. A few years ago, Priyanka heard about the microfinance programme implemented in her village with the support of Plan Sri Lanka by Berendina Microfinance Institute. In order to expand their cultivations, Priyanka got the opportunity to join a microfinance group where she obtained a loan of Rs.30,000/- (US$ 240). Little did she imagine that joining this group would change her life.

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Plan Sri Lanka


In addition to the microfinance services made available to the group members, there were many other services they could take advantage of. Primary among them was the various business development services organised for the group members. The group members were encouraged to enter new avenues of self employment. They were provided various technical trainings that equipped them with the skills they needed to engage in different types of cottage industries. Priyanka got the opportunity to participate in a training programme on soap production. In addition, she also received business development training that taught her the intricacies of running an enterprise. Throughout the world, cottage industries are seen to be a viable option for rural women who want to begin home based income generation projects to supplement their family income, where income from one breadwinner does not suffice. There are several advantages for women like Priyanka for starting such industries. It does not require a large capital investment and can be done from within the confines of ones home. These types of industries use locally available resources or those that can be easily obtained and has a ready market for the finished product. Usually the community members, family, neighbours and even other group members, are their key markets. Priyanka also received counselling and guidance to run a small business enterprise from the field officers of Berendina who frequently visited her. Any issues she faces in running her business – be it business advice, credit support, information or linking with other service providers – the Berendina staff are ready to assist in ways that benefit her.

Stories of Wealthy Families

She says: I’m a group member of the microfinance programme and have taken a loan that I invested in the cultivation activities. In January 2013, I had the opportunity to participate in a training programme on self-employment conducted by Berendina. Under that programme we were trained on how to produce soap in our house as a cottage industry. I was very interested as I had been looking for such an opportunity for a long time. After the training, I told my husband about it and he was also supportive and willing to help me. Now I produce a small number of soap bars per week. I am trying to expand my business little by little with the help of my husband. Now I earn a substantial amount of money each month. I allocate part of it for the education of my daughters. Earlier we faced a lot of difficulties related to finding money for their education. Now this new business of mine has greatly helped us overcome some of our financial difficulties. Priyanka Kumari at 42 has started a new life, that of an entrepreneur. Her family has been given a fresh lease of life as a result of her business venture. She is able to supplement their family income by Rs.8,000/- (US$ 64) per month. Priyanka has begun her journey, and with the help of her husband, her daughters and with that of Plan and Berendina, she is on the road to becoming a successful woman entrepreneur.

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Generating income without dependency The story of the Keeravani group

Microfinance facilities provided through our economic empowerment group have reduced our dependency on moneylenders.” This comes from 15 women and men who are neighbours at Deltota, Kandy who started their group “Keeravani” with a small contribution of Rs.100/- (US$ .8) each. The group was formed as part of Plan Sri Lanka’s household economic security programme implemented by SEEDS, Plan’s microfinance partner.

loans and savings facilities was the biggest benefit they got through

P. Krishnakumary, the leader of Keeravani says that access to small

the economic empowerment group.

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this programme. Loans from SEEDS were obtained at first in August 2010, and members utilized these credit facilities to improve their houses and to expand or to start small businesses. The project opened up access to small loans for group members. Community members who had thus far relied on moneylenders, no longer needed to do so since their credit requirements can be met through

Plan Sri Lanka


Krishnakumary says only two of the members at Keeravani group work in the estates. The rest managed to find work outside the estate such as in farms and engage in vegetable cultivations. “This is all after our engagement with the microfinance group.” Through their vegetable cultivations, these members earn nearly Rs.800/- (US$ 6) to Rs.1,000/- (US$ 8) per day which is comparatively higher than the salary paid by the estates. Some of the members are involved in goat and cattle farming as well, which fetches them a better income than that obtained through estate work. She says that the financial services provided through the project have enabled poor households to increase their income, improve savings and better prepare them to face risks in the future. At the initial stage SEEDS built the capacity of the selected group members to prepare them for programme activities, she reminisces. “We were included in the programme from the outset and now we feel the ownership of the outcomes in this programme.” Krishnakumary appreciates the training programmes she and her members received as part of this microfinance programme.

Stories of Wealthy Families

We received trainings on small business development, household money management and others. The credit support provided through the project also helped families better manage consumption, investments and business risks. It has improved our living conditions, health and education by levelling household cash flow and increasing disposable family income. This programme has built the capacity of people living in the estates and it has positively impacted our lifestyle, Krishnakumary says. Members of the Keervani group are motivated and committed. Having undergone many trainings to build their skills, the group is working together to support all families in the area to move out of poverty. The most important achievement of the group in the short time was the reducing dependency on moneylenders. The members are now better at managing their finances and generating income for themselves and their families without dependency.

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Reaching for the stars The story of Sagarika Malkanthi

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agarika Malkanthi hails from the village of Thenagallandha in Monaragala. When she was 21, she met 25 year old Wijethunga from Anuradhapura. They married and settled down in her village. A year later they were blessed with a little baby girl who they named Subothini Vinoshika and subsequently a few years later a son, Hansika Maduranga. The newest addition to the family is Dineth Prabooditha, another son who was born two and a half years ago. It was during the time of the birth of her third baby that the little family was approached by an officer from Plan and SEEDS- Plan’s operational partner, who told them about the programme to initiate economic empowerment groups (EEG) in the village. They were informed that joining this programme would enable them to get support to start income generating activities, provide access to instant loans and help them develop good financial habits such as savings and monitoring expenses to cut down unwanted spending. Motivated by the need to increase their income to take care of the expanded family, Sagarika decided to join the group. Their EEG was formed and named Dilenatharu meaning shining stars.

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Plan Sri Lanka


Sagarika had received education up to Grade 12 which came handy when it came to organizing the activities of the group and providing the necessary leadership to the other members. The group participated in weekly meetings. They established a separate committee to oversee activities supported by Plan. Group members were trained in business development, financial education and household money management. Through the capacity development programmes they have learnt about the art of managing a small group and making use of the strengths of its members. Through the programme, Sagarika initially obtained a loan of Rs.2,000/- (US$ 16) in 2010 and invested this money in their agriculture activities. In the following year, she obtained a loan of Rs.30,000/- (US$ 240) which she used to cultivate Raja Ala (a kind of yam). In 2012, an ambitious Sagarika obtained another loan, which she used for cultivating corn. Sagarika says: “I could double the quantity that I cultivated because of these loans that I received. As a result of this investment, my income also went up!� Prior to 2010 Sagarika’s monthly and only income was Rs.10,000/(US$ 80) and now it has increased by almost 50%. She also gets an additional income through her new business producing ekel and brooms- one that she started recently. Sagrika was able to initiate these additional enterprises using the loans she received through the programme. Unlike others in her situation Sagarika has never felt the need to borrow money from informal sources such as moneylenders. Before 2010 she used to save Rs.300/- (US$ 2) every quarterly, an amount

Stories of Wealthy Families

she has now increased to Rs.800/- (US$ 6). She is grateful that she can always obtain instant loans from the EEG to fulfil her needs. The household money management programme she underwent made her realize the importance of savings. Sagarika has also developed linkages with one of the key state banks in the village, the divisional administrative office, the Samurdhi (government poverty alleviation programme) office and the Agrarian Services Department. These linkages have helped Sagarika to obtain the services she requires to carry out her business activities. She is also grateful for the support she has received from Plan and SEEDS, especially from the field staff. Their regular visits and guidance in solving problems she faced in the business has helped her to overcome the challenges. Her main priority now is the education of her children; Subothini has two more years before she has to sit for her Grade 10 government examination, and Hansika who is in Grade 4 and will be taking up the Grade five scholarship examination next year. It is a crucial time in the education of her children and Sagarika plans to focus her energy to support them to further their studies. The little family from Thenagallandha has managed to use the support of the project to enhance their livelihood and lay the foundation for a stable future for them and all because of the efforts and determination of an able Mother. Through the aptly named Dilenatharu EEG, Sagarika has truly managed to reach for the stars.

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Taking ownership of their own Development The story of Lionel Perera

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t his home in Rajathalawa, Doluwa in the Kandy district, Lionel Perera, a 46 year old dairy farmer has just finished feeding his

cattle. He takes time off his busy schedule to talk to us of his experience. Lionel was sceptical of projects and programmes that usually come to his village in the name of development. He says that none of the organizations which came to the village promoting microfinance,

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worked for the betterment of the villagers. “This wasn’t so with Plan Sri Lanka’s household economic security programme implemented by SEEDS.,” he says. He notes that the main difference between this programme and others that came before is that, this is the only programme which gave the ownership of the activities to the community by ensuring that the members of the economic empowerment group took charge of their own development and functioning.

Plan Sri Lanka


President of the EEG named Ranaviru, Lionel is married to Wasantha who helps him in tea cultivation, poultry and cattle farming. Wasantha’s mother lives with them. Their current income and earnings depend solely on income generating activities that Plan helped to implement. He came to know about the programme though an officer from SEEDS in 2009. Lionel remembers that when the EEG was formed, he was elected the leader of the group. The difference between then and now is that “Now when we try to develop our group it is not because the SEEDS officers request so, but for the sake of our own development,” he enthuses, adding that the saving scheme that was initiated is equivalent to a pension scheme. “Leadership training improved my leadership qualities, which helps me to lead the income generating activities and to guide my family as well,” Lionel says. Through the programme he has obtained trainings in financial education, which he says improved his basic knowledge in accountancy and financial management necessary for the business. He received technical training in poultry and cattle farming; the latter through the Veterinary Department and former through a private company. He also says that the health and hygiene training which he received has improved his knowledge on health and hygienic practices, which is important not only for income generating activities but also

Stories of Wealthy Families

for personal life. He says that they carry out weekly EEG meetings and participate at SEEDS meetings occasionally. Plan has conducted many projects in his village, and amongst them water and sanitation, road renovation, and educational development projects stand prominent. Lionel obtained his first loan in 2009; and another in the following year to procure cows. In 2012 he doubled the loan amount of the previous years and invested Rs.150,000/- (US$ 1,200) in the poultry farm; he expanded the cages and buildings that housed the farm from 1,500 square feet to 2,500 square feet. After this investment, Lionel’s income level increased by Rs.35,000/(US$ 300) per month. This impacted greatly on his family, especially in the children’s education and health but most importantly by raising their dignity in being able to succeed by making a better life for themselves. Lionel will build on his success. He will continue to use the services of SEEDS and Plan for his further development and for the development of his village. He will also explore other avenues and create linkages that will help him get the services he needs. Most of all he is proud that he and the members of his EEG have taken charge of their own destiny by taking ownership of their own development though the various undertakings of the group.

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Greater independence to manage their households The story of Dilenatharu

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ilenatharu means shining stars in Sinhala. When 50 women from the village of Ududeniyagama, Doluwa decided to call themselves this,

it indicated their optimism and wish to “shine�. This optimistic group of women from Ududeniyagama created their Economic Empowerment Group (EEG) on 26th June 2009. Vimalawathi, the leader of this group, clutching an armful of green beans and with a big smile on her face, says that this economic group has not just resulted in economic changes in the lives of these women, but has also had spill over effects into other areas. For instance, due to their contributions

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to household income, women now have a greater independence to manage their households. Interestingly all the Dilenatharu members are relatives as well as neighbours. Their age ranges from 27 to 63 years and education levels from grade 5 to Grade 10. The establishment of Dilenatharu was an initiative of a project that was backed by Plan Sri Lanka and SEEDS, Plan’s microfinance partner. Most women members in the group are vegetable cultivators with fluctuating incomes. Even though traditionally the male member of the family is seen to be the main breadwinner, women had shared responsibility

Plan Sri Lanka


of maintaining their families by managing the household finances. The occupations they were engaged in brought little income to these women and as a result required regular borrowing from outside sources (mostly moneylenders) at exorbitant interest rates. According to Vimalawathi, ability to identify and access opportunities, motivation and the skills to carry out income generating activities were benefits of the economic security programme offered by Plan. She has a sense of contentment when she looks back and recalls how through this supportive programme, the leadership and the structures needed for their development were put in place. “People are willing to be involved in their own development and the development of their communities. This programme has improved their skills, knowledge and abilities to do this,” she says. “Our group members manage households and engage in a variety of livelihood activities to support their families through income-generating activities. These provide much-needed income for fulfilling household needs.”

has a given women a strong voice, and this is the most important outcome for me” she says. She also adds that access to financial services is another important benefit associated with this programme. Microfinance facilities obtained from SEEDS has assisted their businesses, she adds. Vimalawathi says that members have utilized the monies from instant loans that Economic Empowerment Group extends, for housing, business, cultivation and to meet working capital requirements in their small shops. “The community is being strengthened, by developing income generating activities through the microfinance services,” she adds. She says that they will continue to use the services of SEEDS as it will ‘guide us on the right development path’ and also for financial support. She also says that in a bid to further develop their income generating activities, create business opportunities and arranging buy back agreements with leading companies, they will continue to use SEEDS services.

Vimalawathi says that the group meetings and trainings have given women more self-confidence and a greater feeling of solidarity. The financial education training has improved their basic knowledge in accountancy and financial management much needed for their income generating activities and managing household finances. Their savings are also comparatively high as a result of the trainings they received “Now we are better at managing our finances and using financial services” she states.

Together with the income generating activity, she says that capacity building of group members through the different trainings were indeed a learning experience. When asked what support they envisage in future she responds that they would like to develop more linkages with service providers, government officials and other institutions that can support them in their quest to become “shinning stars”.

“The programme has enabled women to take active roles in decision-making on everything from household finances to family healthcare and the programme

Dilenatharu now has a greater sense of purpose and its members are seeing more hope for their future and the future of their families.

Stories of Wealthy Families

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Standing strong, standing tall The story of the Sawbagya Group

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elimadayaya is a small village in the Siyambalanduwa divisional secretariat division in the Monaragala District. The village is so named because the residents of the village are originally from Welimada in the neighbouring Badulla District. An officer from Plan first came to this village in 2008 with the idea of introducing Plan’s household economic security programme. When the first economic empowerment group (EEG) was formed in the village, few men and a large number of women participated in it. However, after a while, the men gradually dropped out as they had

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little interest to continue. The women of Welimadayaya continued to show interest in the programme offered through the group. They formed not one but two economic empowerment groups comprising nine members each. Interestingly, the members of the group consisted of women aged 25 to 68 years. But for them age was not a crucial barrier to their progress as a group. The two groups were named Sawbagya meaning prosperity and Pragathi meaning progress. The names chosen reflect the hope of this group of women who had come together to fulfil their dreams towards progress and prosperity. Plan Sri Lanka


The very first loan the group took from SEEDS- Plan’s operational partner, was Rs.20,000/- (US$ 160) in August 2009 for a period of three months. This amount was redistributed among four of their members- and a year later in July 2010 a further Rs.170,000/(US$1,400) and in September 2011 another Rs.70,000 (US$600) for six months for three members. An analysis of the amounts taken and distributed among the EEG members indicates that the average amount borrowed per person has steadily increased through the years. Most of the members that obtained these loans used it in their cultivation activities with a few using it to improve their houses. Thanks to the special training programmes implemented aimed at improving women’s skills in managing finances, they now borrow money only when required and only from the EEG or from the Samurdhi Bank (government owned bank established for rural poverty alleviation). They now less and less rely on loans since their annual income from agriculture, which is their mainstay, has significantly increased. For a group of women who had received education up to grade 3 to 8, while only a few were educated up to Grade 10- the EEG has proved to be a lifesaver. Engaged in agriculture and looking for ways to increase their income, the business development, financial education, household money management and other skills development they

Stories of Wealthy Families

received equipped them with the skills necessary to make a success of their group and their own life. When they first started, the women held weekly group meetings to meet and find solutions for issues affecting them and their communities. After they had developed mutual trust with the group members they were able to obtain loans from the EEG. They also obtained loans from SEEDS. The group also plans to undertake an exposure visit – an outing for group members to observe and learn from others like them in other districts. The group also wants to lobby for support to initiate a water project for their village, an urgent need of the community at this time. According to the members of the group the SEEDS officers have supported them in their progress immensely. In addition to providing them with guidance, SEEDS have also supported them in resolving the issues that arose in setting up the group. A group of women isolated in their community, many only with basic education and no other formal skills, have come a long way through this initiative. They have come together with their peers and began a journey that will take them a long way. Despite the differences in their ages, these women have proven that together they can stand strong and stand tall!

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Together towards dynamic microfinance services The story of making of the Lanka Microfinance Practitioners Association The microfinance movement in Sri Lanka started in 1906 with the establishment of the Thrift and Credit Co-operative Societies. In 1985 the government established Regional Rural Development Banks to reach small and medium entrepreneurs. After 2004 Tsunami, there was an influx of foreign aid to the sector, and in recent times even the larger financial service providers including commercial banks is promoting microfinance. Initiated in 2006, the Lanka Microfinance Practitioners Association (LMFPA) plays a facilitating role to build the capacities of member microfinance institutions and by bringing together microfinance practitioners in the country within a network that collaborates instead of competing with each other. This has offered mutual benefits where the organizations share ideas and experiences with each other enabling the dissemination of best practices and learning from the challenges faced by each actor. Through its support to the LMFPA, Plan had the opportunity to encourage microfinance institutions to be more responsive to the needs of communities. The household economic security programme of Plan seeks to increase community access to resources to meet household economic needs and supporting women to access financial services including microfinance.

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In 2007, Plan supported the participation of 2 members of the LMFPA on an exposure visit to Sha Dhaan in India and provided scholarships for members and supported the network in their day-to-day functioning. This has supported the network to develop favourable relationships with stakeholders and foster collaboration, enabling them to engage in lobby and advocacy. Plan also supported the publication of a quarterly newsletter for the LMFPA. Plan’s input to the development of the strategic plans included areas such as advocating for appropriate policy changes, facilitating to create an enabling environment for microfinance institutions, capacity building of member organizations and strengthening the capacity of LMFPA. A landmark in the relationship between Plan and the LMFPA was established when in 2011 the two organizations signed a Memorandum of Understanding covering policy advocacy and social performance management. With a view to bringing discourse on microfinance from the international arena and turning it to suit local contexts, in 2012 the LMFPA translated the Progress Out of Poverty Index training guide and the Social Performance Essentials Handbook to Sinhala with the technical and financial support of Plan Sri Lanka. In 2013, LMFPA started a discussion series called “Enabling Dialogues” with a special focus on issues relating to Social Performance Management. By supporting the LMFPA, Plan Sri Lanka has made a significant impact on the country’s microfinance sector, one that will ensure that communities especially at grassroots levels continue to enjoy sustainable microfinance services.

Plan Sri Lanka


Empowering people through microfinance

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hat do Karunawathi, a 40 year old woman afflicted with polio from a remote village in Monaragala and Lionel a dairy farmer living in Kandy have in common? They are both from remote areas of Sri Lanka, both participants in an Economic Empowerment Group supported by Plan’s household economic security programme. The EEG is a neighbourhood based group that has come together through their mutual trust and support with the primary aim of improving income generation, promoting microfinance and savings among members. The Sarvodaya Economic Enterprise Development Services (Guarantee) Limited (SEEDS) was established in September 1986 by the Lanka Jathika Sarvodaya Shramadana Sangamaya, one of Sri Lanka’s largest non-governmental organisations, providing financial services programmes in Kandy, Monaragala and Kurunegala districts. The objective of this programme is to extend the outreach of microfinance to include the very poor and provide them with financial products responsive to their needs. During the past 7 years, the joint collaboration between SEEDS and Plan Sri Lanka’s poverty focused microfinance programme, has managed to reach 6,000 families who have collectively saved more than Rs. 40 million (US$ 320,000). According to SEEDS, the current total loan portfolio stands close to Rs. 100 million (US$ 800,000) which has provided financial services, coupled with business development services, to groups of micro entrepreneurs – a majority of whom are rural women entrepreneurs. According to Navindra Liyanaarachchi, Manager – Projects at SEEDS Head Office, their programmes in development finance are incorporated to provide a comprehensive approach to solving

Stories of Wealthy Families

unemployment. Interestingly more than 90% of the borrowers are female. The strategy of their projects is to provide security to the children of these members in all aspects ranging from education, health and basic needs. The SEEDS programmes provide aspiring entrepreneurs with the working capital they need to start, expand and diversify their existing businesses and enhance their income. Mr. Liyanaarachchi says that re-energized entrepreneurship, and reinforced market systems are what they want to give the participants of the EEGs. “We have created opportunities for communities in the rural areas of the country and improved their lives by providing them with access to financial services under reasonable terms which are flexible and responsive to their needs, life-changing information and unique opportunities for income-generation. Our programme has two major activities; one is credit assistance for the participants while the other is capacity building of the members to further develop their skills and competencies so that they are able to become more competitive as entrepreneurs.” According to Mr Liyanaarachchi, one of the salient features of this project is that it has given SEEDS the chance to bring these EEG members into ‘inclusive financing’. As a microfinance practitioner, SEEDS offers a wide range of financial and non-financial services to enterprising clients who have no access to credit from the bigger banking institutions to improve their micro and small enterprises. This is mostly because the bigger banks do not lend money without security. SEEDS piloted the financial services programme in Polpithigama in Kurunegala, Galaha in Kandy and in Monaragala. Although the programme was initially started for families in Plan working areas, it was later extended to marginalized families based on the Progress out of Poverty Index (PPI). The programme combines financial literacy and life skills where EEG members are equipped with the skills required to be financially competent and financially sustainable. The project has also expanded to Nuwara Eliya and works in the plantation sector as well, empowering plantation communities. 23


Transforming Lives through Credit Plus Services Some 58,000 active borrowers and Rs. 1.18 billion in loans are results of Berendina Microfinance Institute’s offer to motivated rural micro entrepreneurs the capital they need to initiate income generating activities. Berendina (Gte) Limited (BMI) was established in May 2007 and promoted by Berendina Stichting; an international NGO which operated in Sri Lanka since 1992 having its headquarters in the Netherlands. BMI is a nonprofit company in Sri Lanka. According to H. C. Dilhani, Manager – Planning, Information Management, Fund Raising and Communication at BMI, “Berendina’s objective is not simply granting a loan and obtaining repayment. BMI’s main focus is handling the loan efficiently and ensuring that the institution has contributed to transforming the lives of rural low income communities. This is why Berendina follows a credit plus approach with training and extension services complementing the financial services. The Credit-plus approach basically joins together adequate and timely credit with larger developmental processes such as community organizing, leadership training and entrepreneurship development.” This credit plus approach is applied in the programme that BMI implements with support from Plan Sri Lanka. The primary purpose of this programme is to provide quality microfinance services including credit, enterprise development and other non-financial services to marginalized communities in a sustainable manner. Under this programme, BMI has partnered with Plan Sri Lanka

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for 3 years where Plan supports BMI with technical and financial assistance to establish a poverty focused microfinance programme in Manupa and Kahatagasdigiliya areas in the Anuradhapura district. What sets BMI apart from being just another microcredit funding institution is that the organization lays special emphasis on making a social impact on the lives of its clients. This is why monitoring the movement of clients out of poverty using the Progress out of Poverty Index (PPI) is a key area in the work of BMI. The BMI ensures that credit officers, branch managers, area managers and internal auditors visit a random sample of clients to ensure proper loan usage as well as the impact of their work. BMI, strives to ensure that they serve a financially knowledgeable group of clients. To ensure this, they provide financial literacy training to clients. The training is carried out in an effort to make them understand the type of financial services available and the effective interest rates they pay for different loans. BMI targets the extreme poor and provide loans up to Rs. 25,000/(US$ 200) with no securities or guarantees. This includes those who live in relatively remote areas and plantations with little access to microfinance services. Managing credit risk is given a high precedence within BMI as the portfolio is the major asset of the organization. The Plan-BMI partnership has reached nearly 1,000 families which is around 32% of the total BMI sponsored families in the Manupa and Kahatagasdigiliya areas” Ms. Dilhani says. BMI is keen to continue providing services to the clients and expand their services in the areas which they commenced as a result of this project initiated by Plan.

Plan Sri Lanka


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lan’s programme on household economic security empowers families to be financially strong to face challenges of economic shifts, and to be able to respond positively to the well being of their children. If you want to know more about the programme, please send in your feedback to Communications Department, Plan Sri Lanka, No. 110, Park road, Colombo 05.


Through building financial competencies and life skills of communities and especially women, Plan Sri Lanka aims to support and equip: • Microfinance Institutions to provide financial services to the most marginalized families in a more accountable and responsible manner • Women-headed households in post-conflict areas to have the capacity to keep up with rapid socio-economic change • Young men and women in the most marginalized areas of the country to develop Assets and Wealth to be active citizens in the country • Youth in the Plantation sector to improve participation in economic activities by being ‘financially healthy’ • Girls and boys in the most remote and marginalized districts in the country to be financially disciplined at an early age to make their future aspirations a reality • The most excluded and vulnerable groups of people and communities (pockets of poverty) to have the capacity to take the first steps in wealth creation to benefit from the country’s development achievements


Produced by :

Plan Sri Lanka: stories of wealthy families  

A collection of stories from the micro-finance projects in Sri Lanka through a collaboration with SEEDS and the Berendina Institute.

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