Sunday Observer Online


Sunday, 25 October 2015





Marriage Proposals
Government Gazette

LFSUS to help under-served communities

Lanka Financial Services for Underserved Settlements (LFSUS) in partnership with banks provides a wide gamut of housing needs. The method adopted is a guarantee mechanism of LFSUS as a comfort for bulk bank loans granted to MFIs to grant small housing loans to the rural folk.

LFSUS will provide a credit enhancement mechanism to encourage banks and MFIs and bridge the gap between banks, MFIs and rural folk to finance underserved people.

LFSUS coordinates with banks to use MFIs as a vehicle to reach rural folk and make them bankable. Formal financial institutions, such as commercial banks have little, if any, experience in assessing the risks involved to lend to the poor. LFSUS provides the community a means of accessing loans through project partners.

The methods adopted by the organization in distributing the retail loans to the community and by sustaining timely repayments will help the self-sustaining project which will help expand the MFI's portfolios.

They will also receive technical guidance and support and advice on overall risk reduction, cost reduction and mitigation procedures while developing ongoing projects. The additional strength and networking ability LFSUS provides help in negotiating loans with commercial banks at prevailing market rates. LFSUS will carry out its own due-diligence on these projects individually.


Low income householders in urban areas have great difficulty in accessing loans from commercial banks as they are viewed as not being creditworthy and reliable.

They can access new financing opportunities to empower and build better living standards for themselves through these projects. The householders selected for loans are not the poorest of the poor.

Since its inception, LFSUS has made a significant impact in uplifting the living standards of rural communities spread across the country. LFSUS launched 20 projects and helped nearly 2,000 families benefitting nearly 6,000 people in the Central, Western, Sabaragamuwa, Southern and North Central Provinces. Seven projects have been completed and the loans repaid in full on the due date. This proves the success of this scheme.

LFSUS has now earmarked the war-devastated regions of the Northern and North Central Provinces to carry forward the housing initiative to the people to rebuild their lives after 30 years of strife with a house they could call their own.

LFSUS recently arranged three bulk loans of Rs. 10 million each for three MFIs in Medawachchiya, Kebithigollewa and Shrawasthipura benefitting 265 families and 1,200 people. The money will be used for houses, house upgrading, sanitation, waste water management, access to clean water and lighting among other common amenities.

LFSUS has links with HSBC, Hatton National Bank, NDB Bank, Rural Development Bank and Sri Lanka Savings Bank. The HDFC Bank, Sanasa Development Bank and Bank of Ceylon will join LFSUS soon.

LFSUS has also invited blue chip companies to link with them to embark on 'Village adoption programs' through these housing initiatives under their Corporate Social Responsibility (CSR) project.

LFSUS was set up as a company limited by guarantee in 2007 in partnership with the United Nations Human Settlement Program (UN-Habitat) and the Ministry of Urban Development.

The United Nations in its endeavour to address the issues of poverty, sanitation and housing for billions of marginalized communities across the world, set up The Slum Upgrading Facility (SUF) Pilot program of UN-Habitat in 2004 to address these issues.

The projects were initiated in Kenya, Tanzania, Ghana, Indonesia and Sri Lanka. The success of this program in Sri Lanka has opened new vistas for future development and expansion. UN-Habitat provided US $ 1.4 million to LFSUS as seed capital to implement the credit enhancement facility.



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