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Population (millions) |
19 |
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Gross domestic savings (% of GDP) |
14.6 |
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% Population under $2/day (PPP) |
45 |
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Regulated microfinance institutions |
Cooperatives remain the key microfinance service providers with local NGOs and commercial banks having a small coverage at national level. Historically microfinance activity was heavily subsidized, but now appears to be largely financed by savings deposits. |
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Predominant informal finance mechanisms (ROSCAs, tontines, etc.) |
Money lenders and family members. |
» More country data from the Microfinance Information Exchange Market
General Approach to Regulating
Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland|
Banks |
Cooperatives |
NGOs and foundations | |
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Definition or description of institution |
A licensed commercial bank is a financial institution permitted to conduct all banking activities. (See art.3/part I of Banking Act No.30(1998)) |
A registered society which has as its objective the provision, in accordance with cooperative principles, of specified services contributing to the economic, social, educational and cultural welfare of its members. (See Art. 3 of Cooperative Societies Law) |
A member based microfinance NGO which pools individual and group savings and extends small loans to members |
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Guidelines & restrictions on financial services |
Permitted: deposit-taking; extending credit; borrowing funds and buying and selling for its own account or for account of customers; money market instruments; debt securities; futures and options relating to debt securities or interest rates; financial leasing; providing bank guarantee transactions |
Permitted: deposit-taking and on-lending to members only |
Permitted: credit and savings activities, non-financial services to its members, such as business training, nutrition, education, and environmental training services |
» Download Country Profile of Microfinance Regulation
SANASA Thrift and Credit Cooperative Societies
Summarized from. "A Review of Commitment Savings Products in Developing Countries', 2003 (612 KB, PDF)
By: Nava, Ashraf, Nathalie Gons, Dean S. Karlan, and Wesley Yin
SANASA Thrift and Credit Cooperative Societies is a federation representing affiliated credit unions that serve approximately 10 million clients in rural, peri-urban and urban areas of Sri Lanka. Common savings products offered by SANASA's affiliates include Passbook Savings Term Deposits and Children's & Youth Savings. Deposit collectors are available to all clients regardless of the type of savings product they have chosen. Term deposit accounts have an additional commitment feature since this product design restricts the timing of withdrawals until the account has matured by imposing a fee on early withdrawals.
Hatton National Bank (HNB)
Summarized from: "A Review of Commitment Savings Products in DevelopingCountries', 2003
By: Nava, Ashraf, Nathalie Gons, Dean S. Karlan, and Wesley Yin
In the late 1990s HNB was the largest privately owned Sri-Lankan commercial bank. In mid- 1989 HNB opened 13 GP units at village locations to be serviced by their Gami PubuduwaUpadeshakas, or barefoot bankers. By 1997 the GP program had generated deposit levels that were much higher than loans outstanding. The deposit facilities offered comprises a range of features suitable for microsavers, such as low amounts to open accounts and earn interest. It also offers convenience and thus helps build commitment through its use of deposit collectors.
Savings Mobilization in Sri Lanka
Summarized from "Commercialization of Microfinance - Sri Lanka", 2002, pages 23-24.
By Stephanie Charitonenko and Dulan de Silva
Most MFIs in Sri Lanka rely heavily on savings mobilization to fund their loan portfolios, indicating a fairly high level of commercialization in terms of access to market-based sources of funds. Not surprisingly, cooperatives are the largest mobilizers of small savings, accepting almost SLRs20 billion from members of the CRB (cooperative rural bank) and TCCS (thrift and credit cooperative society) networks. The SBSs (Samurdhi Banking Society) and RDBs (regional development banks) also collect a significant amount of savings; they and the cooperative networks all mobilize more savings than they can use for their lending operations. The balance of these savings resources flows into the traditional financial sector and acts as an additional source of liquidity and loan capital for larger loans in the formal financial system.
This case study can be found in Savings Operations for the Poor: An Operational Guide, edited by Madeline Hirschland, forthcoming from Kumarian Press (1294 Blue Hills Avenue, Bloomfield, CT 06002).
Hatton National Bank, Sri Lanka: a commercial bank downscales
In 1989, the Hatton National Bank (HNB,) a commercial bank in Sri Lanka, initiated a scheme to extend its credit and savings services deeper into rural markets using satellite offices and "barefoot" bankers. This one-page case describes how it managed this scheme and the sources of its success.
See also:
Commercialization of Microfinance - Sri Lanka, 2002, Charitonenko S. & de Silva D.
National Microfinance Study of Sri Lanka: Survey of Practices and Policies, 2002, Gant, R., de Silva, D., Atapattu, A. & Durrant, S.
Developing Microfinance in the North and East of Sri Lanka, 2004, Durrant, S., Gant, R. & de Silva, D.
CGAP Country-Level Effectiveness and Accountability Review (CLEAR), February 2006