Divi Neguma credit scheme to empower low-income families

The Divi Neguma Department commenced operations on January 3, 2014. The Department undertook the task of upgrading the living standards of 1.8 million families, thus benefiting nearly five million people.

Today it is has a banking network across the country and tomorrow the Divi Neguma Credit Scheme will be launched under the theme 'On-the-Spot-Cash' (Asuru Senin Athata Mudal). This is in accordance with the Divi Neguma Development Department's goal of eradicating poverty by empowering people through livelihood improvement projects.

"This micro financing system is a community development program. The Divi Neguma Banking network is assisting the needy communities to depend on income generating venues" said Divi Neguma Development Department Director General Bandula Rathnasiri.

Ceremonies in this connection will be held at 1073 Micro Finance Banks in 327 Secretariat Divisions throughout the country parallel to the main event of the Divi Neguma Sahana Aruna programme.

This credit scheme will ensure credits up to a maximum of Rs. 50,000 without guarantors on a interest rate of four percent.

It will cover five million families including 1.5 million Divi Neguma Development beneficiaries living in 35,440 villages belonging to 14,022 Grama Seva Divisions in the island. They will receive credit scheme to meet their consumer requirements the same day the credit scheme applications are submitted.

Loans for other needs will be given within three days after applications are submitted.

Low interest loans ranging from Rs.5000 to Rs.50,000 will be given for self-employment projects through 1073 Divi Neguma Micro Finance Banks of the Divi Neguma Development Department.

As stated in the Divi Neguma Bill, the department was set up amalgamating the Department of the Samurdhi Commissioner General, Sri Lanka Samurdhi Authority, Department of Upcountry Peasantry Rehabilitation, Sri Lanka Udarata Development Authority and the Sri Lanka Southern Development Authority.

This step was taken to accelerate the Government development work avoiding the possible space for duplicating in steps taken by these institutes. "These institutes work towards eliminating poverty from the country. It is the view of the Government to bring attention to low income families and implementing relief programs enabling them to achieve a better standard of living with nutritional assistance programs.

Following the passing of the Divi Neguma Bill with a majority of 117 votes in parliament on January 8, 2013 in accordance with the recommendations made by the Supreme Court, 27,000 persons employed by the Samurdhi Authority and the five affiliated organisations became entitled to all the salaries and benefits given to other government employees.

The objective of this scheme is to invest income from the village and prevent people falling into debt by borrowing from financial institutions at high interest rates.

The minimum loan provided under Divi Neguma Sahana Aruna is Rs.5000 while the maximum is Rs.50,000. The grace period for repayment of consumer loans is one year.

Thereafter repayments should be made in 24 equal instalments. There is no age limit for obtaining loans.

This loan scheme has been launched for the purpose of helping the beneficiaries to pay for the construction material and labour for their livelihood development projects.

This is being done in addition to the micro finance credit facilities provided through Divi Neguma Community Banks and Bank Societies.

The interest rates of the micro financing have been reduced, Bandula Thilakasiri said. When the Samudra project was launched it was around 13%. Today we give at 4%.

- DY