Micro finance for sustainable development
by Lalin FERNANDOPULLE

Chandula Abeywickrema
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Micro finance is essential for Sri Lanka to empower rural youth and
make them micro entrepreneurs for sustainable economic development, said
Deputy General Manager, Marketing and Retail Banking and Chairman,
Banking with the Poor Network, HNB, Chandula Abeywickrema.
He said micro finance has contributed in a major way to alleviate
poverty in the country by empowering the poor with access to capital and
making them micro entrepreneurs.
Over 70 percent of the population lives in rural areas which has less
access to finance for their livelihood development. Micro finance
provides capital for sustainable livelihood.
"Access to finance through the banking network is low in Sri Lanka
due to the high risk and transaction costs.As a result the need for
micro finance in Sri Lanka has grown and its contribution to poverty
reduction and sustainable economic development in the country is
commendable" Abeywickrema said.
He said micro finance is not merely providing credit to those who
don't have access to finance but educating them to become micro
entrepreneurs and support the rural economy.Micro entrepreneurs
contribute to maintain social order and sustain the rural economy.
"The education system in Sri Lanka does not make youth employable.
The reason for youth frustration and uprising is that they are not
included in the economic fabric of the country. Making youth employable
is one of the aims of micro finance", Abeywickrema said.
The roots of micro finance in Sri Lanka could be traced back to the
Co-operative Societies and the Sanasa Movement which have been promoting
self-employment in the country.
Both has played a salient role in promoting micro finance in the
country.
Alleviating poverty and improving the living condition of people has
been a pressing need in many countries across the world.Micro finance is
a means by which developing countries have been able to reduce poverty
by generating income and creating employment in the rural sector.
Micro finance started in Bangladesh with the Gramin Banking concept
introduced by Professor Muhammad Yunus in 1976.
Abeywickrema said field officers are vital to drive a successful
micro finance program in the country.Field officers support and share
the vision of the micro entrepreneur."Passion, patience and commitment
are pillars on which micro finance is based on.The loan recover rate of
micro finance is high compared to the banking sector", he said.
Poverty alleviation, income generation, employment creation,
financial education, creation of multiple income generating revenues for
banks and rural economic development and the benefits of micro finance.
Financial inclusion, a developed notion of micro finance provides
access to savings, credit, remittances and insurance.
Abeywickrema said the micro finance industry should be regulated and
added that the government is in the process of introducing regulations
for the sector. "Reducing the transaction cost, increasing the number of
field officers and making financial services available, accessible and
affordable are some of the major challenges of micro finance", he said.
The Asia Micro Finance Forum (AMF) hosted by HNB will be held in
Colombo from October 12-15.The conference will focus on the future
direction of the micro finance industry in Asia.
AMF is organised by the Banking with the Poor Network based in
Singapore and it is the largest Asia based micro finance network.The
Forum which takes place once in two years was held last in Vietnam in
2008.
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