Poor Credit

International micro finance experts recommend that donors put the breaks on funding microfinance in Sri Lanka, as system unsustainable.







International micro finance experts recommend that donors put the breaks on funding microfinance in Sri Lanka, as system unsustainable. “Given the plethora of organisations, many mushrooming more after the tsunami, we are telling donors to take a step back and reflect on what they are doing here,” lead microfinance specialist Brigit Helms, from CGAP, told journalists on Friday.

CGAP - the Consultative Group to Assist the Poor - is a coalition of 31 development agencies created by major donor countries and focuses on building financial systems for the poor.

The organisation is doing country level reviews in Sri Lanka on the effectiveness and accountability of local microfinance systems.

The preliminary readings that are based on self reported and unverified data, says CGAP, is pointing to demand for credit not being met, despite excess liquidity in the local microfinance system.

For instance the government’s Samurdhi programme shows over Rs 11 billion in savings but only around