Paper

National Microfinance Study of Sri Lanka: Survey of Practices and Policies

Mapping microfinance in Sri Lanka
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This report provides a map of microfinance activity throughout Sri Lanka. It analyzes microfinance in terms of:

  • The policies and practices of existing actors and environment;
  • The supply of microfinance at the district level.

The results of this study are presented through surveys that examine:

  • Actor activity and the existing levels of supply;
  • Commercial banking sector's microfinance activity;
  • Operating environment in the North and East region of Sri Lanka.

The findings paint a positive picture of the microfinance activity as regards supply, savings, loans and service providers.

The authors list the characteristics of funding of microfinance activity in Sri Lanka as:

  • Most funding is through savings;
  • There is a need for widespread technical assistance funding.

They find the following key issues in the practice of microfinance in Sri Lanka:

  • Concern about the sustainability of present microfinance schemes and about the political capture of microfinance activities;
  • High subsidization of the sector;
  • Inadequate planning, monitoring and evaluation;
  • Need for training.

The study concludes with the recommendations:

  • Ensure the sustainability of present microfinance schemes to protect the current high levels of supply nationwide;
  • Urgently deploy economic recovery initiatives in the North and East regions;
  • Donors focus on medium and long-term funding, as well as on technical assistance and research activities.  

About this Publication

By Gant, R., de Silva, D., Atapattu, A., Durrant, S.
Published