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LOLC, SEEDS for worker remittances to bare good fruit

Saturday, 31 July 2010 18:59

Source: Lanka Times

Socioeconomic Development in Sri Lanka (SEEDS) an arm of the Sarvodaya movement and Lanka Orix Leasing Company (LOLC) signed a deal that would divert migrant remittances from consumption into savings and investments. Migrant workers, or their dependents, often spent their hard earned money on consumption or on unsound investments, which at the end, left them with not enough money to continue their normal lives. Workers who had returned to their homes after years of working overseas soon find themselves in the same position they were in before leaving for greener pastures.

Managing Director CEO, Lanka Orix Finance Company Ltd., Brindley de Zylva, addressing the press this week said because such funds were not effectively managed, remittances were frittered away on unproductive ventures.

One such investment was the construction of houses. "They would spend as much as Rs. 15 to Rs. 20 million building a house in their village and with no takers at that price, it soon becomes a sunk cost. Lacking advice and hardly any investment acumen led returnees to a situation of insolvency."

SEEDS teamed with LOLC would address this anomaly and seek solutions to thwart ill advised ventures and channel such income to more productive personal development ventures.

Managing Director SEEDS, Shakila Wijewardena said these initiatives would be supported by The European Union and UNDP. A sum Of approximately US$ 200,000 was identified for this scheme.

Present at the press conference were Kalsah Amarasinghe Executive Director, LOLC, Kapila jayawardena MD/CEO LOLC, Isahra Nanayakkara, Deputy Chairman, LOLC, Chairperson LOLC, Rohini Nanayakkara, Dayananda Muthukumarana, Chairman Seeds, Shakila Wijewardena, MD SEEDS, Sanjeewa Polgahagedera, Head of Projects, SEEDS, and Ajit Gamage, Programme Cordinator.

LOLC CEO Kapila Jayawardena said about US$ 1.2 billion remitted each year was spent mostly on consumption.Over the past two to three years, such remittances amounted to a substantial sum, close to US$ 4.5 billion.

This initiative would train beneficiaries to channel such income productively and eventually have sufficient saved for retirement. It would also mean they would not have to work all their lives.

De Zylva said these initiatives would include training and channeling finances into investments that would generate income. Simple ventures that could grow and in time mature to be recognized as an effective entrepreneurial activity.

Such activity could be categorized micro finance initiatives that would not need huge funding, but being able to manage with funds at hand, and only in an extreme situation would a loan component be necessary.

Wijewardena said SEEDS employs 1,200 persons, and service about 500,000 customers. Included in their agenda, he said was skills capacity building, which would form core instructional expertise disseminated by SEEDS.