Govts' efforts to improve livelihoods in North, a success

by Gamini WARUSHAMANA

In the rehabilitation process of the North and the East, the government and the private sector has a vital role to play. The government especially has to provide goods that the private sector is not willing to invest on. This will help the private sector to move into the area and start business.

RA Chairman E. A. Amarasinghe

The livelihoods of the people improved tremendously with these business activities. Things have changed for the better after connectivity improved with the partly repaired A-9 Road, restoration of electricity and with the development of other infrastructure.

Mobile phone operators local and foreign banks, insurance and leasing companies, all types of traders have settled in Jaffna city and the main towns and suburbs of he Jaffna district and other main towns in districts in the North.

Most people who witnessed the pathetic situation immediately after the end of terrorism 20 months ago said that the North and the East is improving rapidly.

However, there are segments of people who are always excluded by this market driven system and government intervention is essential to make rehabilitation a balanced and inclusive one for every citizen.

Rehabilitation Authority

The self employment loan scheme and housing loan scheme launched by the Rehabilitation Authority (RA) targets these aspects of post war rehabilitation.

The Government has allocated Rs. 1 billion to the RA for these two loan schemes.

Under the self employment loan scheme a maximum Rs.250,000 is issued to a conflict affected person to start a self employment venture in agriculture, fisheries, animal husbandry, domestic industry or business.

The interest rate is 4 percent and the repayment period is 10 years with a grace period depending on the nature of the venture from six months to one year.

Collateral is not strict and people who come with viable business proposals and can prove credibility of repayment can obtain loans. All people affected by the conflict are eligible for these loans.

Last week in Poonager Divisional Secretariat officials of the RA conducted interviews for loan applicants to select self employment projects.

Most of the project proposals were in agriculture and animal husbandry. Around 400 people were interviewed and the majority of them were eligible to receive loans. They left happily and with hopes.

B.Mariyadasa, A. Sivambaram and V. Annakadi who are living in Jeyapuram in Poonagar said that they are hopeful of the loan and happy with the hassle free selection process and easy collateral of the loans.

A make-shift theatre in Kilinochchi

The success of the projects begun after release of the first round of the loan last December is impressive.

The Chairman of the RA E.A. Samarasinghe and Working Director D.K. Jinadasa last week inspected randomly selected projects in Jaffna and Kilinochchi districts.

K. Karupiya Sera of Malayalapuram in Kilinochchi has obtained a loan of Rs.175,000 and started a small hotel in front of the Baharthi Vidyalaya in Kilinochchi. He also supplies meals for school's functions. He said that he can earn over Rs.1,500 net profit a day. He has started repayment of the loan and pays a monthly instalment of Rs.3,000.

"We returned from Menik Farm IDP camp in July 2010. Previously I did a mobile business and sold food items at Kovil festivals. The LTTE forcibly deployed me in bunker building.

There was no choice and we had to work for the LTTE or pay Rs.5,000 a month" Karupiya said. He said that now they co-operate with the Army and life is better and is full of hope for the future.

There are kulaks with large extents of land or wealthy people who did lucrative business and spent luxurious lives before the conflict who lost everything and are now in a miserable situation. They are also attempting to rise again and the RA loans have helped them to start their businesses.

P. Sivarajah in Malayalapuram is one of them. He had a jewellery shop in Kilinochchi and during the final phase of the conflict he lost everything.

The value of the jewellery he lost is over Rs.5 million. He has obtained a loan of Rs.250,000 from RA and constructed a commercial building with three shops.

Two of them have been rented out and he has restarted his jewellery business in the other shop.

"How is the demand created for jewellery in a community that has returned to their villages with only what they were wearing?" I questioned.

"Gold is an integral part of our culture and people buy at least 1/4 sovereign jewellery immediately they collect some money. The situation is improving and with the restoration of agriculture, demand for jewellery is going up" Sivarajah said.

K. Ganeshalingam of Ramanadhan Puram in Karachchi DS division in the Kilinochchi district has a 25-acre paddy field and he has obtained a loan of Rs.250,000 and purchased a four wheel tractor.

People who have assets too need capital to resume work and the loan scheme has rationally considered all these aspects and practical realities in the rehabilitation process.

In conventional criteria a kulak with 25-acre land is not entitled for a concessionary loan of this nature. The RA officials look at how many employment opportunities these projects can generate.

Most of the agriculture projects begun by loan recipients have become successful.

Dividends

The high price of agricultural commodities in the last few months have brought them dividends. Marimuttu Dhanaraj has obtained a loan of Rs. 250,000 last December. He said that he earned Rs.60,000 net profit within three months and has paid three instalments of the loan.

He has sold brinjals at Rs. 600 per kg when vegetable prices were at its peak. Dhanaraj who returned last July from Kadirgarmar IDP camp after a 14 months stay, as well as others in this part of Kilinochchi are still living in temporary huts covered with cadjan and tin roofs or in a tent provided by UNIHCR.

They are expecting houses from the Indian housing project that has received much publicity in recent times.

The majority of people cannot construct a house without financial support from someone. Their houses have been destroyed or are not in a repairable condition.

M. Sanmuhawale has also started an agriculture project with the Rs.250,000 loan he obtained. He said that agriculture is a profitable venture in Kilinochchi.

Loans have been issued to former LTTE cadres too. Deputy Director of the RA, Ananda Wijepala said that preference is given to them if they are willing to start self-employment ventures. R. Ramalingam is one such former LTTE cadre released after rehabilitation.

Successful vegetable cultivation began with RA credit

He has gained skills in carpentry during the rehabilitation period. He has purchased a carpentry machine and started a carpentry workshop using the Rs. 250,000 loan.

He said that a lot of orders are received and more orders are expected as reconstruction of houses have started. Three people work for him.

Business opportunities in a society rising from ashes are wide ranged. It is easy for the poor to start on a small scale because the demand is low and the big players are still reluctant to enter.

The entertainment industry has a huge potential here.

Sri Munishwaran has sensed this potential and has started a boutique and set up a film theatre using his loan of Rs.250,000.

The theatre is a tin-roofed hut with a 10 foot screen and a projector. There are no chairs and the spectators watch films sitting on the floor. The show starts at 7.00 p.m. The rate is Rs.20 per person. Indian Tamil films have a huge demand here, Munishwaran said.

With improving connectivity, business becomes competitive and therefore not all projects are smoothly functioning.

Production of 'bites' by T. Lakshman and a confectionary industry begun by Subramanium Jayarathnem of Vivekananda Nagar have faced difficulties due to their failure in competing with products coming from Colombo.

Lakshman is struggling to survive and Jayarathnem has ended up as a distributor for a confectionery company based in Kandy.

A tailor shop begun by Arumugam Saundarajha at Ramanandan Puram junction is another big success story in this self-employment loan scheme. He has given three persons employment in his shop and said that his net profit is over Rs.20,000 per month.

Kobalan Mahendran is a postman at the Kilinochchi post office received a housing loan of Rs.250,000. He has partly completed his house. His wife Rajmani said that their house was destroyed in 2008. and they were sent to Ramanadan IDP camp in Settikulam. They returned in March 2010 and lived in a temporary hut.

The housing loan scheme also provide loans of upto Rs.250,000 with 4 percent annual interest and a 10 year repayment period. Government employees too are eligible for loans.

Recovery is yet slow in the inner parts of Kilinochchi and Mullativu districts. Housing is the main issue and apart from the few houses constructed by the ICRC, most people are still living in temporary huts. The internal road system is dilapidated and improved connectivity will accelerate recovery.

Security vigilance in all parts of the North is tight. Military camps are everywhere and soldiers are deployed. Villagers said that the military is very co-operative and there is no issue.

Several initiatives

The Chairman of the RA, E.A. Amarasinghe said that the loan scheme is only one of the several initiatives launched by the government to rehabilitate the North and East. "When we began rehabilitation of these areas, the lives of the people were in a total mess.

People could not come to terms because they had lost everything including their loved ones.

RA officials conduct interviews to select people to grant loans at Poonagar.

We started this loan scheme to support economic activity and to include the people in development. The Bank of Ceylon (BoC) supports us in this program and loans are disbursed via BoC.

The loan scheme is extremely successful and the people have positive attitudes and courage. They have already commenced repayment of loans.

According to RA Working Director D.K. Jinadasa, by the end of March the RA had recommended 324 housing loans and 78 of them were issued. The value of the housing loans issued is Rs.19.3 million. During the period 2,124 self employment loans have been recommended and 122 of them have been issued. The value of self- employment loans issued is Rs.24.7 million.

Disbursement of loans is slow due to risk averse attitudes of some branch managers of the banks. Field officers complain that the Neliaddy BoC branch demand personal guarantors for loans in addition to collateral recommended by the RA. The Neliaddi branch has issued only eight loans from over 20 loans that have been recommended by the RA.

Acting Operations Manager of the BoC in Jaffna district S.N. Manikyasinghem said that BoC is satisfied with the progress of the self-employment projects started by loan recipients and the repayment rate.

"We are ready to give more support to successful projects by extending BoC loans and there are several other loan schemes too to support these conflict affected.

This loan scheme is a massive support to these people. Usually the people who do business here obtain credit from the informal market at 60 percent per annum.

This loan scheme has supported small businesses such as fish sellers to purchase motor bikes, Agriculture in Achuweli, Chunnakam, Kopai and Chavakachcheri has fully recovered and we provide credit to the farmers, Manikyasinghem said.