Central Bank loans boost NE farmers

By Shezna Shums

The Central Bank of Sri Lanka has recorded an increasing number of loans given to farmers in the north and east of the country, which in turn have resulted in enhanced agricultural production from the districts.

Central Bank Governor Nivard Cabraal chairing the meeting with a group of farmers from the Northern Province yesterday Pic by Upul Abayasekara

Assistant Governor W.M. Karunaratne said that some of the loans provided for these people are titled ‘Prabodhini,’ ‘Sarusara’ and Pibidena Uthara’ and are specifically designed for low income earners.

The Central Bank loans were provided to the north and east farmers to help them improve their agricultural activities and thereby enhance their livelihoods.

Apart from this, the Central Bank in giving loans also teaches and encourages the people there to become familiar with banking work and financial activities.

These loan schemes were initiated in the north and east during 2007. To date 30,978 farmers have benefited from these loans; of this 10,218 small enterprises have benefited, in addition to 21,000 other persons.

‘Prabodhini’ was initiated in the Southern Province and was gradually introduced to the north and east, which over 24,300 persons benefiting.

During 2010 and 2011, 12,000 farmers in the north and east took advantage of the ‘Sarusara’ loan scheme of the Central Bank, while ‘Prabodhini’ now has about 9,007 members under it loan scheme.

To date the Central Bank has provided a total of Rs. 799 million in terms of loans provided for the people in the north and east of the country.

Under the ‘Sarusara’ loan scheme, the north and east recorded 12,282 farmers attached to this scheme and the Central Bank recorded a total of Rs. 1,168 million in terms of short term loans in the north and east alone.

With the increased financial aid, the farmers in the north and east have managed to improve their agricultural activities and during the last few months Jaffna red onions, bananas and green chillies were brought to the Dambulla, Colombo and Meegoda Economic Centres and helped control some of the agricultural produce prices in the country.

Prices of some vegetables were brought down by 50 per cent as a result of the vegetables entering the markets from these areas, while the prices of red onions, bananas and green chillies dropped by 75 per cent over the last few months.

The Urban Development Department carries out inspections and oversees the work carried out by the receivers of these loans.

In total there are 20,364 persons in the north and east benefiting from these loans and a total of Rs. 2,176 million have been utilised for this cause.

The Central Bank in 2010 opened its first branch in the Jaffna District.

Speaking to the farming leaders, Central Bank Governor Ajith Nivard Cabraal said: “We are not just in the offices; we know what is happening in the country and all the districts and we want to help you develop. We have our feet on the ground and want to get involved in your development. We also look into the issues and problems faced by the people in Jaffna and want to help improve your livelihoods.”

The Governor also urged those who were present at the Central Bank’s media briefing yesterday to go back to their areas and tell the people they meet back home that the Central Bank was willing to help them and for others to also benefit from the various loan schemes available from the bank.

“We will give you all the assistance you need and hope that you will also cooperate with us. We understand that we also have our shortfalls, but we want to improve and develop. When you, the farmers and others in the district, prosper, then we too prosper and the food security in the country improves as well. We have to work together.”

Over 30 people from the north and east were present at the Central Bank’s briefing.

Karunaratne noted that the loan schemes had been extremely successful and people had benefited. Despite poverty being one of the key issues in Sri Lanka, the poverty levels have shown reducing numbers, he revealed.

During the event it was highlighted that poverty in the 1990s was at about 25 per cent and this has reduced to about 15.2 per cent in 2002 and later reduced to 7.4 per cent in 2010, according to a survey by the Census and Statistics Department.

“This 7.4 percent needs to be looked after. These people need assistance to help uplift their living standards. We can do that only by enhancing their income levels and we are in the process of doing so. We need to see that this 7.4 per cent is ultimately reduced to zero,” he added.

“The Central Bank, through special schemes, provides financial assistance to these people and various other vital groups in society and during this process we are also expecting these people to contribute to the GDP so that the country as a whole will develop and growth will increase.”

Sri Lanka recorded eight per cent growth and is targeting higher growth in 2011, it was highlighted.

The Central Bank encouraged the stakeholders of these schemes to contribute their output so that the country could ensure sustained growth.

“These people are making an enormous contribution and they too will notice that their living standards will improve as a result,” stated the officials.

In the north, the Central Bank provides financial assistance in the Districts of Mullaitivu, Kilinochchi, Vavuniya, Mannar and Jaffna, while in the east it is present in the Districts of Trincomalee, Batticaloa and Ampara.