Sarvodaya Development Finance: Geared for a better tomorrow with ethical and sustainable solutions

Sarvodaya Development Finance Chairman Channa de Silva

Sarvodaya Development Finance, a trailblazer in the microfinance and SME industry in Sri Lanka, plays a pivotal role in uplifting the lives of the grassroot communities. Supporting the gallant motives of its parent organisation, Sarvodaya Movement, Sarvodaya Finance is committed to empower industrious individuals through ethical and sustainable financial solutions. Touching upon various aspects of Sarvodaya Finance and its unparalleled commitment towards serving the society, Sarvodaya Development Finance Chairman Channa de Silva shared his thoughts:

Q: What are your views on the performance of Sarvodaya Development Finance in the 2017/18 Financial Year?

A: We have turned around the organisation in a very significant manner. This year we not only automated the entire company and its operations, but also enhanced the branding and physical outlook of over 30 branches and over 20 service centres islandwide. Steps were taken to boost overall quality of our human resources. We have also ventured into social media platforms, to take Sarvodaya Finance’s message across. 

Unlike other companies, profits earned by Sarvodaya Finance is driven towards charity work implemented by its parent organisation – Sarvodaya Movement. All in all, we have performed well in terms of making profits, expanding the business by at least 50%, expanding our disbursements and co-business activities by 50% during 2017/18 financial year. And thus we are taking bold strides in the financial industry, especially in relation to micro finance and SME related businesses. 

Q: Sarvodaya Finance took a number of strategic measures including structural changes during this period. What were the challenges faced during implementation? 

A: In line with the famous quote ‘Culture eats strategy for breakfast,’ we aim to change the working culture by initiating a number of programs to boost efficiency, motivation and competitiveness of employees. As an organisation serving the grassroots, we adopt a socially-conscious and compassionate approach to empower people in the rural areas. 

In a macro environment, the high interest rates, high inflation, depreciating currency and disappointing economic growth has affected the country’s economy. Businesses are struggling for repayment and growth, but we continue to look for positivity in the industry. Recently the Minister of Finance proposed a 30% cap for micro-finance lending. We gladly welcome this as it is something Sarvodaya Finance has practiced throughout. Unlike the companies that charge exorbitant interest rates, we are an organisation which operates professionally and responsibly, while fulfilling the requirements of all stakeholders.

Q: Do you adopt a special criteria for recruiting employees for Sarvodaya Finance? Can you describe the training and workshops facilitated?

A: We recruit people who have a heart to serve the rural communities, and we often give opportunities for those coming from the villages in addition to those from the urban areas with a strong passion and commitment to empower people in the villages. We are strongly looking at the development of human capabilities with creativity, while fostering passion and drive to provide an excellent service to our customers. Training and workshops will be conducted across the organisation and throughout the island, where more steam will be driven by the third and fourth quarters of this year to continue the momentum. 

Q: Can you briefly explain the performance-based incentive scheme which was introduced to your staff?

A: Sarvodaya Finance is a typical microfinance organisation stemming from a not-for-profit background. It is an organisation driven by values where strong emphasis is placed on staff welfare as a main aspect of development. Incentives, recognition and rewards are some of the key factors that optimise human resource engagement. So we have started incentivising all staff in various aspects including deposits, lending and recovery areas, where they will be offered with bonuses, insurance and other facilities based on their performance. We have recognised distinct teams within the organisation, and reward them generously and substantially under several categories.

Q: What are the key goals set by Sarvodaya Finance for this year?

A: One of our main goals is to change the culture of the organisation. We believe the change of culture will drive strategy and strategy will be rewarded with incentives. We will continue to invest in human resource development, team building and personality development. This year we will also focus on marketing and enhancing the brand value of the organisation, and engage in initiatives that will touch the hearts of the people. We also intend to collaborate with Sarvodaya Movement, with the aim of raising awareness in health issues and to focus on non-communicable diseases like diabetes and hypertension. As part of our CSR initiatives we will continue to support and rekindle the aesthetics of Sri Lankan children in terms of art and culture. 

As an organisation which contributes its entire profit for charity, Sarvodaya Finance has continued to serve the nation as an exemplary and outstanding organisation. In fact, we aim to become an international model for microfinance and SME business development on a global platform. Last year Sarvodaya Finance won the Social Entrepreneurship Award at the World Economic Summit, in return for its notable social service.

Q: How do you view the company’s position within the industry in the next two to three years? And how do you plan to achieve this?

A: The industry is quite convoluted, and it continues to pursue profits. Unfortunately the borrowers are unaware of the drawbacks of borrowing including costliness, due to the intricacy of the process. This helps such finance companies to thrive, while it proves to be detrimental to the borrowers. However, as an ethical and upright organisation, we are not attuned by profitability, cheap recognition or self-driven shareholder motives. 

Sarvodaya Finance is quintessentially a selfless organisation which operates in a professional, strategic and progressive manner. Sarvodaya Finance is the key funding arm for the stalwart Sarvodaya Movement, supporting all its charity work across many spheres. This includes providing all means for the sustenance of nearly 400 orphans for the last 30 years. 

Sarvodaya Movement has been operating in the villages for 60 years, and it has developed an unparalleled brand value and respect in the villages. We, as Sarvodaya Finance, would like to be a part of it. So far we have funded diverse social projects across 16 sectors including providing infrastructure facilities, education and health. In fact, we want to be the flag-bearer in this sector with responsible lending and ethical performance, and aim to be globally recognised as an exemplary financial institution serving the rural areas.