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Colombo, Sri Lanka, November, 16 2009 - Microfinance providers have an extensive network in the country with over 10,800 outlets and the SANASA Movement has the largest number of active outlets followed by NGOs, as revealed in a nationwide survey of microfinance institutions in Sri Lanka. This was published by the GTZ-ProMis (Promotion of the Microfinance Sector) and the German Technical Cooperation GmbH in Sri Lanka.
According to the report, traditional microfinance products are offered by a large number of microfinance Institutions. A broader range of financial services is offered such as saving, pawning, leasing and insurance and pension products by microfinance institutions. All Samurdhi Bank Societies (SBS), Thrift and Credit Cooperative Societies (TCCs), Cooperative Rural Banks (CRBs), Regional Development Banks (RDBs) and banks as well as 89 percent of the NGO MFIs and 60 percent of finance companies offer savings and deposits products.
Microfinance providers covered by the survey have reported a total of over Rs. 126 billion in volume outstanding of
savings and deposits and over 26 million savings accounts. A large number of microfinance providers (95 percent of NGOs, 92 percent of CRBs, 86 percent TCCs and banks, 83 percent of RDBs and 64 percent of SANASA Secondary Unions) have said they offer complementary non-financial services to their microfinance clients.
Many microfinance providers focus extensively on savings and do not fully exploit the resources thus mobilized to extend credit to finance the income generating activities of their microfinance clients. The ratio of loans to savings is one to 2.6 in terms of volume outstanding and one to 5.9 in terms of number of accounts.
According to the report, the microfinance sector in Sri Lanka consists of a diverse range of institutions which do not fall under the purview of a single authority and there is currently no single and up-to-date database on these institutions. The Sri Lankan microfinance market seems to be to a certain extent conservative, focusing more on the proliferation of variations of the same traditional products, lacking innovative approaches which could overcome the inherent barriers in access to microfinance.
Category: Payday loans