1.   OBJECTIVES

• Upliftment of low income earners’ living standards through providing of financing for their income generating activities.


• For this more women’s participation expected

Loan Scheme is proposed to be implemented in the following selected 14 districts

3. TARGET GROUP OF THE LOAN SCHEME

3.1 Micro Entrepreneurs who are economically active and living in areas coming          under the Project.
     
3.2 Women and widows who represent family units and are financially active while   engaged in income   generating      activities and  living in areas  coming under   the Project.

4.  Eligible Projects

Loan facilities are considered for mainly the under mentioned income generating activities.

1. Agriculture
2. Fisheries
3. Livestock
4. Trade and Services
5. Small Industries
6. Other

Detail list of Income Generating Activities (IGAs) is given in Annex 1

5.  ELIGIBILITY

Loans can be granted to beneficiaries who fulfill following eligibility requirements and have been organized as Groups.

5.1  Applicant should be a citizen of Sri Lanka

5.2   Applicants should be within the age group of 18 – 55 years. (Those who exceed this age limit can apply jointly with a family member within the above age   limit.)

5.3   Applicants should be permanent residents within the area of the Branch or should have their enterprises located within the area of the Branch.

5.4   Should be a permanent member of a Group who was involved  with the social mobilization process actively for at least 03 months after having organized as Groups and contributed to compulsory savings programme.

5.5   Should be economically active persons with a family income not exceeding, Rs. 15000/= and in low income bracket.

5.6   Applicant should be a micro scale entrepreneur who runs a commercially, technically, and financially profit viable enterprise.

5.7   Loans could not be obtained from another similar for the borrowers who are           beneficiaries of a micro finance scheme.

5.8   Applicant should not be a borrower or a guarantor of a defaulted loan of any Financial or Non-Financial Institution

5.9   Under this loan scheme loans can be considered also for starting up entrepreneurs   who are capable of contributing a minimum of 25% of the total investment cost.

6. LOAN AMOUNT            

For the Sectors of Agricultural activities, Livestock and Fisheries

6.1   Loans can be considered up to a maximum of Rs. 50,000/= when granting for the first time.

6.2    Loans can be considered up to a maximum of Rs.100, 000/= when a borrower        who has satisfactorily paid the previous loan applies for the second time under   this loan scheme.

 For Non-agricultural Sectors (Industries / Services and Trade)

6.3   Loans can be considered up to a maximum of Rs.100, 000/= when granting for the first time.

6.4   A second loan up to a maximum of Rs.150, 000/= and a third loan up to a maximum of Rs.200,000/= can be considered for a borrower who has satisfactorily paid   the previous loan / loans.

07. REPAYMENT PERIOD
7.1   Maximum repayment period for   agricultural activities inclusive of  the grace          period is 08 months.

7.2  Maximum repayment period for Non-Agricultural Projects inclusive of the grace period and   with due   consideration to   the   business cycle   is 36 months.

08.  SECURITIES

8.1  Loans can be considered against inter-se guarantee of two members of a socially mobilized Group.

8.2  In considering block loans for matured Community Based Organizations Partnership Organizations should obtain a deposit not less than 25% of the loan amount as security on mutual agreement.

09. METHODOLOGIES OF GRANTING LOANS

Two (2) main methodologies are used in granting loans:

9.1  Granting of loans to Entrepreneurs who formed into Groups on the inter-se guarantee of Group Members.

Under this method persons who are basically poor but economically active and with various skills should be formed into small groups  and launch the programme introduced as social mobilization, by directing them to various social and economic activities, financial discipline (compulsory savings), development of attitudes, and skills. When the Groups mature, loans may be granted to them on their inter-se guarantees.

9.2  Linkage banking loans can be granted to eligible and matured Community based Organizations/ Partnership Organizations