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| Sunday, 8 August 2004 |
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Features |  |
| News Business Features Editorial
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Hope blossoms in the hills by Vimukthi Fernando
K. Kamalam smiles. The betel painting her lips red in a deep set wrinkled face. She is 41 she says, and had been working in the estate since she was 12. It is Sunday. The holiday estate workers enjoy. But, she has no one to share it today, except her pet dog. She sits alone in her new house, sometimes chatting with a neighbour passing by. Both her husband and son have gone out to earn an extra rupee. For the past five months or so, both of them did not receive any payment from their employer, says Kamalam. "They are paid Rs. 300 each. If there is work after 5.00 p.m., then the pay is more. Ever since we borrowed money they work every day. Even on Sundays till very late, but without payment." They had borrowed Rs. 100,000 from her husband's employer at 10 per cent monthly interest, to build their house. K. Navajothy tells a similar story. She had to pay twenty per cent interest when she pawned her jewellery for an emergency. "For the Rs.1,500 I borrowed, I had to pay Rs.2,000 more after about six months," she says. When the time came for redeeming her jewellery she did not have enough money. But, this time, she had a 'helper' within reach. She borrowed Rs. 2,000 from the 'Credit and Savings Association' (CSA) of the Heathersette Division, Concordia Estate, Nuwara Eliya. 'Credit and Savings Associations' are becoming a household word in many of the estates in Nuwara Eliya and the surroundings. Already there are over 30 associations in 23 estates. The membership has taken wing, soaring to hundreds and two hundreds from a mere eight or fourteen, within a short period.
Their need is met. Credit, for consumption, emergency, agriculture and small businesses. Easy and accessible. But, not 'summa' (free) at all. The members show they are credit-worthy, by saving with the society. Regular saving paves way for credit. "Previously I was working in the electricity board. And tried to open accounts for the community introducing them to some of the banks at that time. There are over 200 accounts in the Ginigathhena Rural Bank and the Hatton National Bank, but not a single cent was saved" says M. Nagalingam, Treasurer of the CSA, Agra Division, Carolina Estate. The reasons are many. The distance to the bank - most of the time over eight kilo meters, time consumed, paperwork involved, a 'hand to mouth' lifestyle and bureaucracy by way of guarantors and sureties making it impossible for them to even apply for a loan, loom large between the estate community and savings. 'What is the point of saving, if we cannot take a loan?' A question valid and without answers in keeping with the formal system. In such a situation, whom does the estate worker turn to? It is the money lender. The 'mudalali, school teacher, kangani, the government employee... anyone who can spare more money are sought. And the result? Interest rates ranging from 10 to 30 per cent per month, sapping the little money they earn, creating a vicious cycle of indebtedness. That is why we stepped in, says R Dhanaraj, Project Officer, CARE Sri Lanka. With years of experience on micro credit and lessons learned from previous projects carried out within the estate sector, CARE with the consent of the management and the community themselves, carried out participatory research to find out actual community needs. The progress was "very slow, initially" according to Project Officers who worked day in and day out with the communities. "It was not easy at all. They are not used to savings. We had to conduct so many awareness programmes to establish the first unit" adds Sugath Adikaram, Project Officer. Communities were made aware of the need of savings and committees were selected from the communities themselves. "We visited house to house making people aware of the need of savings. Sometimes we had to visit the houses to collect their monthly savings as well. The first month, we only had 15 members and collected Rs. 330 as savings but now we have 122 members and collect about Rs. 5,600 per month," says Esther Nasamany, Secretary, CSA, Kadawala Division, Carolina Estate. Accessibility is the appeal of the CSAs. They are there, in their own communities, their estate divisions themselves. They know who is in need and how much a person can pay back. "They can appeal to us 24 hours of the day. If a loan is applied in the morning it could be given by evening. Most of the time it could be given instantly," says T. Balamuraly, Treasurer, CSA, Top Division, Madakumbura Estate. Each CSA member has a savings book in his or her name, where the treasurer notes down the savings. Loans are provided for emergencies. "Sometimes they need about Rs. 50 or 100," says J. Meiyappan, President, CSA, Denmarkhill Division, Concordia Estate. "We get loans during sickness, a funeral, a wedding, or if we suddenly have to visit relatives outside," says T. Subhashini, who opened savings accounts for her two children. Children's accounts are popular, for they get a higher interest, than the other deposits. The interest rates vary, from one society to another, but stay in the range of 6.5 per cent to 12.0 per cent, with fixed deposits and children's savings getting the highest rate. However, interest rates for credit stays at five per cent per month, in all the estates. The committee keep the books in order and train others from neighbouring estate divisions on how to manage their CSAs. Training and facilitating CSAs is the responsibility of the 'key CSA' or the first CSA established in an estate. They take every opportunity to gain knowledge and clear difficult points, pestering CARE officers for information. "I do not know about societies elsewhere. But, it is an amazing project in my estate," says an Assistant Superintendent, impressed by the progress of his workers. "I can see what they can do. As managers we still think that they cannot do anything alone. But, now they have proved that they are intelligent enough to run a bank, on their own. It is not only the saving part, their organising and leadership skills play a large role. Now I know whom I should share my ideas with if I want to implement anything," he adds. A facility closer to the community during the lean months run by the workers themselves will pave way to diffuse tension and lessen problems between the management and the workers opines another Senior Asst. Superintendent. "I have been working in many areas from Rakwana, Badulla to Nuwara Eliya. In some areas for example in Badulla, the dry spell is about four months. We cannot offer them much work during that time and they do not get as much pay into their hands. It is during this time that problems start. I am very comfortable here knowing there won't be such problem," he explains. "The management is very supportive," smile the young and energetic committee members of the, CSA, Top Division, Madakumbura Estate. They are proud about the office premises, provided by the Management. The management representatives "attend our monthly meetings on time, provided us facilities for training as well," they add. All the CSAs have plans to develop the credit and savings facilities. As diverse as the communities, they range from issuing school stationery and other consumer items on credit, through establishing a chicken farm, cultivating 20 acres lying fallow within an estate premises, to opening a centre for computer studies using the computer gifted by the management. Meanwhile, Kamalan's husband and son, toil for their employer, day in and day out. "Are there any plans for giving out sizeable loans, such as housing loans?" I ask J. Wijeysunderam, President, CSA, Heathersette Division, Concordia Estate. "In about two years, when we have over Rs. 200,000 in our hands." Yes, there is hope. |
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