Microfinance in Sri Lanka

Mixing business with pleasure was no problem for RESULTS National Manager, Maree Nutt who stumbled upon and then visited a Grameen microfinance replication program while on her recent holiday in Sri Lanka.

After a number of wrong turns we finally found ourselves at the remote and idyllic surfing spot.  Fortunately, ‘remote’ still meant that our post surfing reward was breakfast at the equally remote and simple Hilltop Canbanas and café run by the ever friendly owner, Dilani.

Imagine my surprise when my son Jack spotted that our tea was served in mugs emblazoned with the words ‘Grameen microcredit’! I soon learned that Dilani’s husband Indika was the manager of a nearby branch of what is now called “Prime Grameen”.

Starting with some talk about Muhummad Yunus and RESULTS, it didn’t take long before Dilani had arranged for me to visit her husband’s branch of Prime Grameen in the bustling town of Monaragula, the following week..

Prime Grameen has 48 branches around Sri Lanka. The Monaragula branch has fifteen staff, most of whom spend Monday to Wednesday going out to the villages to collect weekly loan repayments and savings deposits from their 2.600 women clients.

My visit was at the end of the week when approved new clients come to the branch to receive their first loan. The process had begun two weeks earlier with discussions with Branch staff go into villages to identify potential clients who interested in improving their lives financially and who are sufficiently poor by the Bank’s formal assessment process.

Apart from credit, a package of financial services is provided. For example a $2 life insurance policy provides immediate cancellation of the loan plus 50,000  (approximately $400) rupees to the family should the woman borrower die accidentally.  Each woman must also open an interest bearing savings account (9%) and save a minimum of 60 rupees or 50 cents per week over 51 weeks of the loan.

A very important part of Prime Grameen’s business model for sustainability is to offer a range of other savings products to the non-poor.  Fixed deposits and children’s savings accounts offer good incentives and are available to any member of the public. These deposits help provide the loan capital as well as cover other costs.

At the branch that day I met Soma, a smiling and gentle 55 year old woman who would receive her first loan of 25,000 Rupees (just over $200) for a sewing business. She is widowed and her son lives in Colombo but does not visit or support her to any extent. She planned to buy 2 sewing machines and have one worker assisting her from her home. She seemed very sensible, modest and capable, and also very excited. I look forward to seeing Soma one day with her life improved

I also thank Muhammad Yunus for the gift of Grameen which has been replicated to near and far corners of the world. 

RESULTS has long advocated for increase quality and quantity of microfinance (credit, savings and other financial services) within the Australian aid program. Most recently RESULTS volunteers have also advocated to protect the Grameen Bank from threats to its operations and governance from the Government of Bangladesh. See more at www.results.org.au

Why is undernutrition an important development issue?

by RESULTS Intern Fiona Holdsworth

According to the World Health Organisation, malnutrition claims the lives of over 3 million children each year, predominately occurring in 34 developing countries. Studies report that 165 million children aged under 5 have stunted growth due to malnutrition and an estimated 870 million people go hungry worldwide. The British Medical Journal, The Lancet, has also attributed 45% of all child deaths to malnutrition.

Quality nutrition is important to combat high rates of child mortality, reduced brain development and stunting. Children who have suffered malnutrition face additional hurdles in succeeding in the classroom and beyond.

The economic costs of malnutrition are also considerable. The UN Food and Agriculture Organization reported that globally, malnutrition, including obesity resulting from unbalanced nutrition, could be causing $3.5 trillion in health costs and lost productivity. This translates to 2-3% of Gross Domestic Product on average for developing countries. In Africa, it is estimated that up to 11% of GDP is lost to under nutrition every year, which is more than 10% of lifetime earnings per capita.

Nutrition for Growth: Beating Hunger through Business and Science

Nutrition for Growth was a global summit on 8 June that aimed to eliminate undernutrition in our lifetime through collaboration by civil society groups, governments and businesses. The event was headed by UK Prime Minister David Cameron, Brazilian Vice President Michel Temer and the Children’s Investment Fund Foundation president Jamie Cooper-Hohn.  The main success of the summit was an agreement with 51 countries, businesses and civil society groups to save the lives of 1.7 million children by the end of 2020.

The Summit also aimed to achieve the following outcomes by 2020 –

• Ensure at least 500 million pregnant women and children under two receive adequate nutrition.
• Reduce the number of stunted children under the age of five by at least 20 million.
• Increasing funding to prevent stunting, encourage breastfeeding, and increasing treatment of severe acute malnutrition. This is expected to save the lives of at least 1.7 million children under the age of five. 
• Increase the amount of funding towards nutrition related research.

Funding for nutrition is an excellent return on investment. It is expected that for every $1 spend on nutritional interventions such as those agreed at the Summit, the return from reduced health costs and increased economic opportunities is $15. The Nutrition for Growth summit has been heralded as a great step forward to combat malnutrition. The summit secured new commitments of up to US$4.15 billion to tackle undernutrition up to 2020, $2.9 billion of which is core funding with the remainder secured through matched funding from business and civil society groups.

While the pledges of the summit are a great step forward, according to the World Health Assembly, the $4.15 billion pledge is still well short of the estimated $10 billion required to tackle malnutrition comprehensively.

What is Australia doing about the issue?

The Australian Government pledged at the Summit to:

• provide an extra AUD$40 million over the next four years to support a new initiative to help more than one million people in the Asia-Pacific region improve their nutrition and access better food; and
• join the Scaling Up Nutrition Movement, which provides financial support to countries which have developed national nutrition plans. . 

Despite the absence of a strong Australian presence at the Summit, the pledge to support nutrition in the Asia-Pacific provides some assistance to a region which is not a high priority for other donors, and the decision to join the Scaling Up Nutrition Movement provides a basis for increased Australian support for nutrition programs in the future.

Nutrition focused aid works

Combating malnutrition is vital to combat poverty in the Asia-Pacific region. One of our largest aid recipients, Indonesia, is a fantastic example to demonstrate the importance of aid funding to improve nutrition. The Indonesian Government, with international aid, has been able to combat malnutrition by improving the level and diversity of domestic production.  The UN’s Food and Agriculture Organisation have recognized Indonesia for successfully reducing malnutrition from 20% to 9% in the past 14 years.

What can we do to combat malnutrition?

RESULTS Australia is committed to increasing the awareness of and action to improve nutrition to end poverty.  While the Nutrition for Growth Summit is a great step forward, more can be done.

The following actions can raise awareness of and call for action on malnutrition. These can be as simple as:

1. Send a tweet to your local MP about why nutrition is important to you and use the hashtag #nutrition4growth. Make sure you follow us on twitter and like us on facebook for all of the latest updates.
2. Write a letter about the importance of nutrition to your local newspaper or MP 
3. Visit our website for more information - www.results.org.au