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Wednesday Sep 25, 2024
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The ‘Banker Financial Inclusion Award’ of the Banker Magazine UK is conferred to only one global victor each year, recognising its efforts towards promoting financial inclusion. Hence, this award is a remarkable recognition which marks a lifetime achievement for NDB.
Commenting on the award, NDB Chief Executive Officer Rajendra Theagarajah said, “We are simply delighted and honoured by the prestigious global recognition bestowed on NDB by the Banker Magazine UK. Beyond the prestige and honour, for us, being the sole global recipient of the accolade is an affirmation of our innovative and comprehensive efforts towards promoting the national cause of livelihood development at grass root level; empowering communities, households and individuals in Sri Lanka through aggressive geographic expansion while extending meaningful micro-financing solutions such as ‘NDB Divi Aruna’.”
With the socio-economic resurgence subsequent to the cessation of a 30 year civil war, the Bank has intensified its growth strategies towards the rural sector which essentially forms the backbone of the country’s economy. Considering that over 80% of Sri Lanka’s population consists of rural population, NDB’s focus and emphasis on the rural economies is both vital, timely and will contribute significantly towards nurturing a strong middle class.
Persisting upon its objectives for financial inclusion, NDB introduced the ‘Divi Aruna’ (Awakening of lives’) scheme in 2010, aimed at developing livelihood for prospective micro/ small scale entrepreneurs who would usually not come within the mainstream of banking. The philosophy for introducing this scheme underlies the thinking that; in the on-going economic resurgence that will generate many growth opportunities – the marginalised individuals in the rural sector may lose out, if not given a helping hand at inception.
The scheme that was commenced in the North and East now reaches out to every part of the island, fuelled by the aggressive geographic expansion strategy of the bank. The primary feature of this initiative is that no collateral is taken as security for the loans. Loan approval is primarily based on the Bank’s evaluation of the applicant’s vocation and its confidence in the success of the enterprise.
The Divi Aruna loan scheme also aims to promote a savings culture while including the marginalised and the under-banked into the main banking stream. Supplementing the NDB Divi Aruna loan scheme, is an investment based savings scheme which mandates the borrowers to contribute an additional agreed amount every month towards a savings build up which could be used as collateral for future expansion of business activity. Since most Divi Aruna borrowers indicate a tendency to graduate to the SME sector within a short period; such savings build up is vital both from a personal and business point of view.
To date, NDB has financed projects across a gamut of industries through its Divi Aruna loan scheme. These projects range from purchasing boats, equipment and nets for fishermen to providing working capital for women engaged in making maldive fish, financing tractors for farmers, purchasing equipment for pottery makers and livestock for dairy industry, granting financial assistance for infrastructural improvement, supporting the efforts of local craftsmen as well as facilitating financial support and advisory services to identified key sectors such as Ceylon Cinnamon.
Further, in a concentrated effort to empower the export oriented crops in the country, NDB pioneered ‘Cinnamon to the World’ in January this year – a giant national initiative that aims to empower the Cinnamon growers, exporters and Cinnamon related product manufacturers in the country; with a vision to stimulate Cinnamon export growth in Sri Lanka. NDB’s ‘Cinnamon to the World’ is a long term strategy rolled out to partner the industry. As such, NDB’s association with the industry spans from grass root level small scale home growers to large scale exporters.
This affiliation is not only limited to financing but also encompasses empowerment and strengthening of the support system across the value chain thus creating a conducive environment for accelerated growth.
Today, financial inclusion has evolved as an integral part of NDB’s business proposition. NDB Divi Aruna financing activities have now become synonymous with every branch expansion and the Bank has substantially increased its industry coverage to cover many livelihood schemes lying at the bottom of the economic pyramid.
“Looking to the future, we envisage that Divi Aruna Scheme to be further expanded and streamlined to include more targeted market segments such as small scale agriculturists, cultivators and milk farmers, registered community based organisations already functioning at grass root level and any new organisations formed under the supervision and guidance of NDB. It is also envisaged that the expanded product coverage would include micro leasing, micro livelihood loans and financing of community based organisations and/or their members on a selective basis in addition to empowerment and capacity building programs. “We will leverage on technology to reach out to the under-banked segment in rural Sri Lanka in a more cost effective way through mobile banking. We are confident that NDB’s initiatives for financial inclusion will continue to contribute immensely to the nation’s aspirational economic development objectives by reaching out to the hard working, underserved yet most deserving economic sectors,” Theagarjah reiterated.
