DFCC Bank unveils Rs. 500 m fund to support smallholder dairy farmers

Monday, 1 July 2024 00:34 - - {{hitsCtrl.values.hits}}

DFCC Bank Vice President MSMEs Chandana Wanigasena

Marking a milestone initiative to strengthen Sri Lanka’s dairy industry, DFCC Bank has allocated Rs. 500 million to finance smallholder dairy farmers, in line with its commitment to supporting sustainable development.

This dedicated initiative by DFCC Bank is the brainchild of the bank’s MSME (Micro, Small, and Medium Enterprises) Unit and is built upon the successful experience of lending to the beneficiary farmers of the USDA-backed Market-Oriented Dairy (MOD) program. This special credit line, made available entirely by DFCC Bank, aims to provide crucial support to the sector under concessionary interest rates, fostering growth at the grassroots level, particularly amongst smallholder dairies, which form a significant part of Sri Lanka’s dairy industry.

DFCC Bank Vice President MSMEs Chandana Wanigasena made the announcement during the closeout event of the Market-Oriented Dairy (MOD) program. The “Sri Lanka Dairy—The Art of the Possible” event took place recently celebrating the MOD program’s achievements supporting Sri Lanka’s dairy smallholders.

At the event, Wanigasena highlighted the remarkable progress made by DFCC Bank’s MSME Unit, which has successfully financed over 2,500 dairy farmers through a value chain financing model supporting MOD’s efforts to transform dairy farmers into entrepreneurs. This model has significantly contributed to the industry’s growth, exemplifying an effective and scalable approach to agricultural financing.

“DFCC Bank allocating this substantial fund underscores the BANK’S unwavering commitment to the dairy sector. By supporting the proposed DFCC-MOD Dairy Farmer Loyalty Programme and the MOD’s proven model of creating a pool of dairy entrepreneurs producing 100 litres daily, we are taking concrete steps to enhance smallholder dairy farmers’ financial sustainability and growth prospects,” Wanigasena said.

The initiative demonstrates a substantial financial investment into the dairy sector and highlights the bank’s strategic focus on critical industries with the potential for significant economic and social impact in Sri Lanka. Offering financing under concessionary interest rates makes the initiative highly attractive and beneficial for smallholder farmers. The focus on value chain development, the adoption of 10 Key Performance Indicators (KPIs), and support for MOD’s Climate-Smart Dairy (CSD) initiative further emphasise the bank’s commitment to sustainable agricultural practices.

The Market-Oriented Dairy (MOD) project, based in Sri Lanka, is funded by the United States Department of Agriculture (USDA) ‘Food for Progress’ initiative, and implemented by Improving Economies for Stronger Communities (IESC), a Washington DC-based not-for-profit organisation. The project’s efforts to double the milk production of participating dairy farmers to enhance their technical knowledge and create an entrepreneurial, business-oriented mindset helped farmers make intelligent investments, and the bank assessed and lent with confidence.

Through targeted support to drive sustainable development within critical industries in Sri Lanka and a strong emphasis on value chain financing, DFCC Bank plays a pivotal role in transforming the dairy sector and ensuring its long-term sustainability and prosperity.