The study evaluates key components of the Samurdhi Programme’s savings and credit intervention. They are the group savings and intra-group credit component, the Samurdhi Bank Programme, and the credit for microenterprise development programme. The analysis addresses the following issues: the extent to which the programme has engendered a savings and credit culture among participants; the dynamism and sustainability of Samurdhi’s savings groups and Banks; and, the extent to which they have reduced the vulnerability of the poor. The study also looks at the socio-economic impact and sustainability of Samurdhi’s microenterprise development credit component (SASANA). Key findings to emerge from the analysis are that Samurdhi’s group savings and intra-group credit component and the Samurdhi Bank Programme are functioning as vital sources of emergency credit for Samurdhi beneficiaries. The programme also works better in relatively favourable rural areas rather than in urban areas or rural locations where infrastructure facilities are very poor. However, programme sustainability appears to be heavily reliant on the income transfer component. In contrast, the microenterprise development credit component has failed in its objective of promoting the poor to higher income growth paths. The reasons for this are deficiencies in the programme itself as well as constraints such as infrastructure bottlenecks and imperfections in the market for technology. Moreover, the high rate of default makes the microenterprise development credit programme completely unsustainable in the long run.
Table of Contents:
- Group Savings, Intra-Group Credit and Samurdhi Banks
- Credit and Microenterprise Development
- Conclusions and Policy Implications
by Ramani Gunatilaka and Rozana Salih