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Toronto Canada and Singapore.
He has over 25 years experience in the field of marketing. He was trained in Bangaladesh under Professor Muhammad Yunus in year 1999 in Micro Finance.
He added value to the concept to suit Sri Lankan poor and middle income earners and re-introduced the “Grameen Concept” to Sri Lanka in May 2000. Thousands of youths are employed now in Micro Finance in Sri Lanka helping tens of thousands of poor to uplift their living standards.
Incidentally Ratnayake is the Pioneer in Micro Finance in Sri Lanka. He has trained thousands of youth and put their valuable contribution to the development of country’s economy by providing opportunity to work in various financial institutions. Almost every senior staffer in Micro Finance today has been trained under Ratnayake.
Sri Lanka also follows the Grameen Concept and has achieved remarkable success in poverty alleviation in Sri Lanka since year 2000. The poor who did not have three meals a day are now enjoying much improved living conditions; their children who were not attending schools now have access to formal education, and people who did not have houses are now living under their own roof. Thanks to Grameen.
Micro Finance through the ‘Grameen Concept’ was introduced to the world by Professor Muhammad Yunus in Bangladesh. He won the Nobel Prize for it in 2006. The concept was designed to uplift the poor through self-employment projects.
Loans were provided to the poor without and collateral or any guarantors as capital for small-scale businesses. The Grameen Concept is recognised worldwide as the most effective tool for poverty alleviation in any country. It is a vital tool for Sri Lanka to empower the poor and make them micro entrepreneurs for sustainable economic development.
Alleviation of poverty has been the most challenging task for Sri Lanka Governments since the country’s independence in 1948. Sri Lanka Governments have previously introduced many programs to reduce poverty in Sri Lanka with dry rations; medical facilities and small-scale funding provided to the needy in order to uplift their lifestyle. These programs however have been unable to reduce poverty in Sri Lanka up to now due to many practical and political reasons. The Grameen Concept was introduced to Sri Lanka in the year 2000.
Though microfinance has contributed towards the uplifting of the poor and their living standards with some finance companies in Sri Lanka too getting involved in micro finance, it has however not been regulated by any Act in Sri Lanka. Since the process has to be run in a disciplined way, discussions have been had with authorities to work out the proper logistics. Unfortunately nothing came out of this exercise.
“Microfinance is not a money making system; it is a system based on the progress of the poor people and the upliftment of their livelihood,” said Daya Group Consultant Victor Rathnayake.
Microfinance is the most acceptable tool to develop small scale businesses in any developing country. Especially in Sri Lanka after a 30-year long war, the north and east of Sri Lanka are high potential areas for microfinance at present.
With the end of civil strife in Sri Lanka, new vistas have surfaced in the sphere of microfinance, especially in the Northern and Eastern Provinces, where only limited operations were carried out previously due to security concerns. It is clearly seen that there is a reawakening of the nation and the needs of small scale entrepreneurs are multiplying.
Only women are eligible for this loan system where we empower the female population in Sri Lanka. The mother is the source of strength in a developing family in this segment of society. Development of children’s education also remains a main feature of the program. All school going children should attend school if they obtain a facility from us.
Our main focus is to develop the social and economic background of needy families. We provide free training programs to develop their entrepreneurship skills, product knowledge, saving habits, product quality and also financial discipline.
A proven record of an almost 100% recovery rate has been achieved in microfinance continuously for the last 10 years in Sri Lanka. Weekly collections and repayments exceeding 100% attracted the financial market to the microfinance product. Microfinance is also recognised as the most effective scientific tool for poverty alleviation. Therefore, microfinance is considered as the No. 1 product available in the financial market today.
“We do not have formal documents for the people to fill nor do we insist on government employees standing as sureties. So we do have a certain amount of risk, but we are ready to take that risk because we are helping poor people. We have given loans to small and medium scale entrepreneurs without insisting on collateral or looking at their repayment capability. We look at their courage, their willingness to do a business and ability rather than collateral/guarantors,” said Rathnayake.
“We have experience and expertise in microfinance by running the program for last 13 years all over Sri Lanka. Our experience is that women are more responsible than men. They run the family very well and when they take a loan they invest the funds in some economic activity and repay the loan from the returns of such investments.
“We look at the person’s capability of doing a business and whether that person is worthy of getting a loan. We do not give loans for consumption like building houses, weddings, or any other non-employment activities. Micro financing of paddy and subsidiary crop famers is not limited only to financing their farming activities but also provision of seed materials, other inputs and also knowledge. Most of these farmers are the rural poor who are still denied loans from established financial institutions mainly due to their poverty and ignorance.
“These microfinance loans start at levels of Rs. 25,000 in the first year, Rs. 50,000 in the second year, Rs. 75,000 in the third year and Rs. 100,000 in the last year. This is the essence of microfinance. Loans are not provided till the lapse of three weeks during which time we help them to understand the current situation of the country’s economy.
“The rate of repayment of microfinance loans is always almost 100%. As an example we can cite the case of a lady who started her business with a loan of Rs. 3,500 to make 50 string hoppers a day. Today, she makes 10,000 string hoppers a day with a net profit of around Rs. 10,000 earning herself Rs. 300,000 per month. Her husband has also joined her and now delivers string hoppers in a three wheeler,” he added.
“Our need is to know where they live, about their husbands and the kind of self-employment project they will be involved in. Our bond with micro-entrepreneurs is quite close because we meet them every week. Our officers go to their houses and look at their business operations. These officers also go to the village, gather the people from the vicinity and advise them. The repayment for the loan is weekly as well.
“At these weekly meetings, we also mark attendance which should be more than 65% for them to get a second loan. In urban areas the market range is wider than in rural areas. Microfinancing through the Grameen Concept is a scientific program for the development of the urban as well as rural poor in any country. It is very vital for Sri Lanka, after a 30-year long brutal war, every Sri Lankan is looking forward for development.
