Govts' efforts to improve livelihoods in North, a success
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.
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
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.
The self employment loan scheme and housing loan scheme launched by
the Rehabilitation Authority (RA) targets these aspects of post war
The Government has allocated Rs. 1 billion to the RA for these two
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
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
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
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
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
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
"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
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
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.
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
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
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
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.
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
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
"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,