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| Sunday, 25 August 2002 |
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Business |  |
| News Business Features Editorial
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Banking on Grameen to eliminate poverty The bank of the poor, Ceylinco Grameen Credit Company Ltd., which is modelled on Grameen Credit of Bangladesh, has to date assisted 3,650 businesses in and around Colombo and Jaffna.
"The only qualification to be eligible for a loan is poverty. Initially we give a collateral-free loan of Rs 5,000," said Executive Director Ceylinco Grameen Credit Co Ltd., Victor Ratnayake. Once the first loan is recovered, the borrowers become eligible for the second, third, fourth and fifth stages and the loan amount increases to Rs 10,000, Rs 25,000, Rs 50,000 and Rs 100,000. "Once a loan is obtained, we monitor the borrowers closely to ensure that they do not spend the money on unnecessary things, but for the specific purpose of establishing a business, however small it may be. The business can vary from making soft toys to lunch packets, selling thambili, fish or plastic utensils". At present Ceylinco Grameen has 50 centres in Colombo and four centres in Jaffna. Each centre has 75-80 members who have obtained loans to start businesses. The daily follow-ups, advice and training by the field staff have helped the bank maintain a recovery rate of 104 per cent.
"We meet the recipients weekly to discuss their problems and collect the loan instalment. Initially, we gave loans to both men and women, but now loans are given only to women as they are more credit-worthy," he added. Mr Ratnayake said all children of school going age of beneficiaries must attend school. "If there is a problem, we will assist them as education is a means of getting out of poverty," he said. A host of benefits are provided by the company to uplift the lives of beneficiaries in addition to training on business development, accounting and product development. A person who wishes to support a needy family to start a business can do so by making a one time payment of Rs 5000 under the Ceylinco Grameen Patron Scheme, said Ratnayake. Jayanthi Kulendran, a 46-year-old mother of two, supplies lunch packets and short-eats to shops. "I am doing well because of the credit I got from Ceylinco Grameen Credit Co Ltd. I initially borrowed Rs 5000, paid it back and I have gradually been able to get a loan of Rs 50,000. "Earlier I took money for credit and got into severe debt. Now I am happy thanks to Ceylinco." Ushangani Thambirajah, a young girl of 22 years, makes soft toys and paper toll pictures for sale. "After completing school education, I was at home doing nothing when my mother heard of this scheme. "I got involved since mum is overage and does not qualify for a loan. They gave us a free training course on making soft toys and helped us purchase the raw materials and deliver the products to shops." Speaking of the bank's inception, Ratnayake said that all this became a reality after Ceylinco Group Chairman Lalith Kotelawala read the book Bank for the poor, written by Professor Mohamed Yunus of Bangladesh, the father of the Grameen Bank concept, while recovering in bed after the Central Bank bomb blast. Kotelawala had thought this is the way to eradicate poverty in Sri Lanka and there has been no turning back since then. He met Professor Yunus in Bangladesh, sent two officials to study the concept, established the company and started giving credit within three years. The company was established in May 2000 with two million rupees collected from the subsidiary companies of the Ceylinco Group. The program was started at Mosque Lane, Colombo 3. Benefits of the scheme * Looking after the needs of school going children * Insurance scheme for the beneficiary and spouse * Lottery scheme for members * Members have to deposit five per cent of the loan and cannot withdraw it unless in an emergency. The initial deposit with the interest is given to the beneficiary after 10 years to start a business. (This mainly targets the children of the beneficiary.) * Programme for higher education |
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