Developing Microfinance in the North and East of Sri Lanka

This study is concerned with developing more effective microfinance service provision in the North and East regions of Sri Lanka, than what exists today. The report finds:

• Diverse range of practitioners undertaking different kinds of microfinance activity;
• Lack of a development based approach;
• Low levels of microfinance service provision in most parts of the region.

The report is presented in three parts which present:

• Main practitioner groups in the North and East regions;
• Overview of the microfinance activity by geographic area;
• Development of microfinance service provision in the regions.

The report finds that:

• Absence of mid-term funding is a significant constraint to the economic development of the region.

The study recommends that:

• Government and international community should work together to implement area based sector development approaches;
• Each district should have programs that include strong international technical assistance, institutional development, organizational strengthening, capacity building, and direct financial instruments.

The paper concludes with recommendations to help the cooperative sector, commercial banks, and donors contribute to the economic recovery of the North and East regions of Sri Lanka.