World Vision Sri Lanka (WVSL)
The hallmark of World Vision Sri Lanka (WVSL)'s credit-based income generating programme can be stated as follows:
Working on the principle that the success of a CIGP depended on trust in the capacity of the people whom the programme was meant to benefit to see success as in their own self-interest. Particpants have to see and accept that default is not an option that is open to them if the programme is to achieve its aims. To get to this point may take months of patient work by a project officer resident in the region but not necessarily in the village in question. It is the officer's role to challenge the villagers to express their needs and goals, to access their own capacity to help one anotherand themselves and to work with freely elected village leaders to ensure that they can take their place as technically competent and responsible programme administrators. This may require the introduction of a basic literacy and numeracy programme, some training in recordkeeping and assistance in the design of open meetings at which savings and loan targets are announced, debated and publicly recorded.
- First, it was based on close co-operation with existing social and institutional structures to monitor implementation procedures and access expert technical assistance from official government sources. The programme deliberately sought to use the infrastructure and the bureaucracy altready in place rather than develop its own support systems and interface with domestic loca government and planning authorities.
- Second, the programme was village based with all members of a co-operating village able to participate so long as specified individual savings were met.
- Third, the programme was run entirely by village personnel, with such thnigs as loan application assessments, loan administration and collection procedures entirely the responsibility of the village and its elected programme administrators. Representatives from government agencies on the programme committee are there in a non-voting capacity as observers, resource persons and advisors.
- Fourth, programme discipline and protection against the corrosive force of corruption is seated not in organizational procedures but in the requirement that the village hold regular open meetings to announce successful loan applicants, record repayments received, discuss delinquencies and allow comment on how village savings can be utilized to complement the goals sought of the programme. Openness of all programme details regularly and formally broadcast was the mechanism chosen by the programme's founder and designer to mobilize community enthusiasm, encourage broad participation, and harness the discipline of peer review and peer pressure.
When the village structures are in place and a modest savings-based revolving fund is in operation, WVSL makes available a once-off grant to the community's revolving fund. The typical grant is USD 4,000 and it is this money that forms the core of the CIGP and against which loans to village members are drawn. The size of the fund increases as profits and member savings are ploughed back into the programme. Commercial rates of interest are charged and all profits have been ploughed back into the fund in all cases, though it is open to the village to have the fund waste away if this is their decision. Between 1977-87, not one of the 700 villages to which the programme has been taken had decided to waste their revolving fund, experiencing 98 percent on-time repayment rate (compared to 40 percent for banks in the same area).
The average is a community of 100 families, each with an average of five members. The elected CIGP committee that oversees the implementation and openness procedures numbers 13 persons, including the local Rural Development Officer of the Gvernment of Sri Lanka and the WVSL village worker. The latter two, however, have no official role other than as observers and as the persons who are responsible to ensure that the accounts of the village CIGP are independently audited once a year. All other members are elected for a term of nine months, during which time they or their families are ineligible for a programme loan.
Loan delinquency, if any, is delt with at the village level, with peer pressure the critical weapon used to maintain individual fiscal discipline. Nonetheless, the model does not reject the importance of corporate responsibility and community support to individual borrowers, especially where business problems or the failure of a microenterprise are clearly attributable to factors beyond the control of the borrower.
- Abstracted from:
- Remenyo, Joe, "Where Credit is Due: Income-generating programmes for the Poor in Developing Countries" London: IT Publications, 1991.
Hari Srinivas - hsrinivas@gdrc.org
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