Female Empowerment and Bolstering Smallholders via Micro-Finance
| by Michael Roberts
( January 3, 2013, Melbourne, Sri Lanka Guardian) The SDF should not be confused with the STF (Special Task Force). However, the Social Development Foundation does serve as an innovative pathfinder and remover of obstacles in the manner of special combat forces. They have been empowering smallholders and poor rural folk in the District of Jaffna through enterprising savings and microfinance activities for over a decade now. They have sponsored fifty savings clubs in recent times and have 4634 members, with an overwhelming majority (4103) being women.
The SDF was initiated in 1988 by a retired asst commissioner of co-operative development, serving Jaffna District- Mr. Shanmugam Gnanaprakasan (since deceased) and was registered under the GA, Jaffna according to the Social Service Act. It depended purely on private and local funds. But it had a chequered history at the outset because of the wartime conditions. It then suffered a body blow when the SL Army broke out of its Palaly enclave in 1995 and the LTTE chose to enforce an exodus of all the people of Jaffna town and the peninsular west as part of its military strategy.
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In recent times, however, the SDF has been growing in strength by the day. It has a flow of capital from its cluster of savings deposits and revolving credit schemes (see below), though also benefiting from donations provided by individual well-wishers. Through the People’s Bank it received a loan of one hundred lakhs from the National Trust Fund in 2011 and is now anticipating a loan of 200 lakhs in the coming year. These donations are used exclusively for granting assistance in kind (for e. g. seedlings) to the lower and lowest income groups of the membership.
The SDF now has its own savings of 58 lakhs which generate interest. As vitally, none of its members are in default in paying back the small loans that they have received at 15% per cent interest (with 3 per cent of this return being folded back into their local club).
The SFD system sets up local savings clubs whose members are encouraged to keep savings books. The clubs then promote candidates for the receipt of micro-finance loans from the central body for specified productive enterprises. Decisions as to WHO should receive WHAT are taken by the central body. The emphasis is on productive ventures not consumption — so that loans are towards self-empowerment and capital growth on a small scale.
Thus, typically, the loans are directed to the support of smallholders in paddy vegetable and tobacco farming. While the motto of SDF speaks of “little drops of water making an ocean,” to my mind the metaphor which captures their pursuit best is that associated with seedlings: say, “from little acorns sprout great oaks.” Indeed, I was informed that several small farmers who were part of this micro-financing venture have grown into substantial business ventures.
I have no reason to doubt this claim. In any event Myrna Setunga, who directed me towards the SDF, has actually visited a few of the smallholder recipients and was animated by the viability of the whole enterprise. Note, moreover, that the “formation of saving clubs and creation of revolving credit schemes” is just one of the SDF’s objectives. Community development, leadership training, “the eradication of illiteracy” and health education are among the aims that it embraces. The SDF brochure also speaks of rehabilitating widows and the handicapped in the context of the recent wars and the “promotion of … social justice and reconciliation.”
My conversation with Ms Jeyamani Joseph (Vice-President), Ms Rugmany Anandavel (Coordinator) and Mr. P. Chandrasundaram (Secretary) on 22nd November 2012 revealed the foundations of thorough-going accountancy that underpinned the work of this organization. Behind this method, I surmise, are three deep societal currents: (A) the spirit and method of the old-school cooperative movement established by the British in the second quarter of the twentieth century; (B) the sound educational traditions of the Jaffna people; and (C) the habits of thrift and meticulousness sustained by middle-class Jaffna. By “middle-class” I refer here to the middling and lower-middle class rather than the landowning, gentrified haute bourgeoisie that people down south have been more exposed to.
Anecdotal information indicates that small-scale micro-financing efforts can be found elsewhere in Sri Lanka today. I have no information on their degree of success. What requires stress here is the Social Development Foundation of Jaffna is a model these others should emulate. As local and migrant philanthropists as well as the government seek at this moment to rehabilitate the northern reaches of the Vanni, the SDF exemplifies one pathway of sustainable enterprise among the farmers, traders and fishermen of these areas. It is a form of self-empowerment centered upon womenfolk. Since women probably outnumber men in the war-torn north, this emphasis is particularly pertinent. In the office-bearers of the SDF those Tamils and others who desire to aid the people of the northern Vanni have teachers of method, accountancy, honesty and industry that can launch a thousand sprouts of economic well-being.