Programme to uplift rural poor from micro finance debt trap | Daily News

Programme to uplift rural poor from micro finance debt trap

An island wide programme to uplift financial literacy and rescue the rural poor from the micro finance debt trap will be launched in Anuradhapura today (2).

This programme is implemented by the Department of Samurdhi Development under the auspices of the Ministry of Samurdhi, Home Economics, Micro Finance, Self Employment and Business Development under the guidance of State Minister Shehan Semasinghe. In addition, the empowerment of 200,000 Samurdhi beneficiary families is scheduled to begin this year.

These facts were revealed at a ceremony held at the Ministry yesterday morning  (01) to mark the commencement of the duties for the New Year. Secretary Neil Bandara Hapuhinna and other officials were present at the event which was presided over by Minister Shehan Semasinghe.

The awareness programme will be launched at 10 am today at the Saliyapura Samurdhi Bank under the patronage of State Minister Shehan Semasinghe. Simultaneously, 54 Samurdhi Banks in the Anuradhapura District will conduct a pilot project today and tomorrow to raise awareness on financial management, what the appropriate institutions are to obtain loans and how to identify the actual interest on a loan. Low-income people in rural areas are trapped in the microfinance debt trap, with some microfinance institutions offering loans at interest rates ranging from 40% to 360%. There have also been reports of people committing suicide or relocating as a result of not being able to pay their debts. The legal framework for regulating these finance companies is being developed and the objective of this programme is to increase the financial literacy of the people so that they do not fall into that trap.

The State Minister said that the Government is focusing on providing loans at concessionary interest rates to relieve the Samurdhi beneficiaries who are currently burdened by this debt trap.

State Minister Semasinghe said, “Most people think that the Samurdhi Bank benefits only Samurdhi beneficiaries.

But it is not limited to Samurdhi recipients. There is room for everyone who can do business as well as low income earners to join that banking system. Our Ministry has the strength to achieve the desired goals, especially in building a people-centered economy. We are fulfilling that responsibility properly,” he said.

He also inaugurated the Prosperity Development Bureau and the Beautiful Village Office under the State Ministry yesterday.