Originally published: August 22, 2008
Source: Daily Mirror
A new survey has found that Sri Lanka's financial services market is primarily a microfinance market, with over 80% of households having total borrowings of less than LKR100,000 (US$928). The survey carried out by the German Technical Cooperation (GTZ) has found that the outreach of financial services in Sri Lanka is quite extensive, with over 82.5% of households having accessed financial institutions for savings and credit requirements. However, significant disparities do exist across regions and sectors with the estate sector identified as under-served in relation to the urban and rural sectors.
The survey covered 3,000 households across 22 districts. The objective of the survey was to determine the access to microfinance services and identify barriers to access. The survey finds:
- Over 60% of households have accessed MFIs for their financial needs;
- Institutions such as Samurdhi Banks are particularly important for lower income groups as over 50% poor households have obtained loans and over 40% have saved with them;
- There is a strong savings culture in Sri Lanka with nearly 75% of households having saved in a financial institution;
- State banks are generally more popular for savings with over 75% of households saving in these banks.