Getting Creative

Sri Lanka’s micro finance institutions are looking at securitising their lending portfolio as low cost credit lines are drying up. Sri Lanka’s micro finance institutions are looking at securitising their lending portfolio as low cost credit lines are drying up. Sarvodaya, an indigenous non-governmental organization, is leading the way, with plans to raise Rs. 100 million by securitising part of its loan book.

Hatton National Bank, Sri Lanka’s largest privately held commercial bank, is also looking at securitising its Rs. 4 billion portfolio, its Chief Executive Rajendra Theagarajah said.

Disbursed through its micro finance arm SEEDS (Sarvodaya Economic Enterprise Development Services), Sarvodaya raises funds via compulsory savings schemes through over 3,500 members attached to village societies islandwide.

Targeting the poorest of poor, over 1.2 million Sarvodaya members have saved up over Rs. 2.3 billion todate. But savings, on top of a handful of concessionary loans from Oxfam Netherlands and few local commercial banks, are barely sufficient to keep SEEDS’ lending machine ticking.

As at March 31, 2005, SEEDS loa