Microfinance for poor families
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| Microfinance is helping the poor |
 | Plan is supporting the efforts of the Sarvodaya Economic Enterprise and Development Services (SEEDS) to provide savings and credit services to the poor in Sri Lanka’s Kurunegala district.
Through the pilot programme, Plan and SEEDS have agreed to develop an approach which can effectively extend microfinance services, especially to women and the poorest living in marginalised communities.
A study conducted by Plan indicated that the needs of poor people regarding access to financial services are largely unmet. While a number of programmes were set up with the intention of providing financial services to the poor, many of the people indicated that they did not use the services.
The poor could not meet the minimum requirements to qualify for the services, and the depository and credit services offered by the financial institutions weren’t aligned to their needs.
SEEDS is a well-established microfinance institution that is effective at helping people at the lower end of the economic scale. They have substantial outreach and a lot of experience in offering sustainable finance.
Plan's programme
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| The programme is determined by people’s needs |
| The pilot programme is helping broaden participation by the poor and very poor of Kurunegala in micro-finance services. Specifically the project aims to:
- Provide financial services to households in Kurunegala (a specific percentage of which are women and the poorest of the poor);
- Offer services appropriate for the people who need it;
- Monitor and evaluate programme performance for sustainability and effectiveness to ensure viability, desired impact and potential to expansion.
Using participatory techniques, Plan and SEEDS conducted market research to gain deeper understanding of the financial needs and preferences of the communities. The partners conducted wealth ranking to categorise the different ‘degrees’ of poverty of households and to identify the very poor with the aim of designing services that matched their requirements and monitoring their participation in the programme.
Key staff of SEEDS and Plan visited a successful microfinance programme in Myrada, India to learn the methods used there, determine key features that can be adopted for the pilot project and plan an approach that is more responsive to the financial needs of the target communities.
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