Agricultural Loan Program Brings Sri Lankan Rice Farmers Record High Revenues

WOCCU Employs Value Chain Linkages to Benefit Small Farmers

September 09, 2010

Organization: World Council of Credit Unions
Phone: (608) 395-2000
 Sri Lankan rice farmers
Shirani Somalatha, pictured above with her husband, joined Women's Co-op's agricultural lending program after a drought drastically reduced her family's rice harvest. The following year, they increased their yield by 86%, Shirani repaid her loan in full and was able to deposit about US$1,000 into savings.

COLOMBO, Sri Lanka — World Council of Credit Unions (WOCCU) has helped small-scale farmers in Sri Lanka increase their revenues up to 71% by developing an agricultural lending program that combines lending with technical assistance and market relationships and introduces higher-yield, higher-profit rice varieties for farmers. WOCCU established the agricultural lending program in Sri Lanka's north-central region with 10 branches of Women's Development Services Co-operative Society Limited (Women's Co-op), a credit union owned and operated entirely by and for women.

With funding from the U.S. Department of Agriculture, WOCCU worked with Women's Co-op to develop the robust agricultural lending program and disburse the first batch of loans totaling US$36,000 to 192 member farmers in November 2009. After a successful season, Women's Co-op lent an additional US$105,000 to 309 farmers in May 2010.

Suresh Wijesinghe, deputy director of WOCCU's program in Sri Lanka, stressed the value and positive economic impact of the agricultural lending program in the lives of Women's Co-op members during a session at a U.S. Overseas Cooperative Development Council conference in May. According to Wijesinghe, Women's Co-op members have improved agricultural production technology and found new market relationships and financing through value chains, a series of entities that take a crop from field to market.

"Women's Co-op members are improving their lives through the credit union's services, from group lending to insurance to health and education services," Wijesinghe said at the conference. "The agricultural lending program is being rolled out on a pilot basis in four [now 10] of the branches, with the plan to expand to all branches so that all members can benefit."

WOCCU's Sri Lanka program has contracted CIC Agribusinesses, a national agribusiness company, to provide technical training and farm inputs to farmer groups before the seed is sown. The company offers premium prices for several rice varieties, particularly for a proprietary variety of red basmati. With the program coming to a close next year, WOCCU is currently working with Women's Co-op to appropriately factor the cost of the farmers' long-term technical assistance into the price of their loans and develop purchase agreements with CIC Agribusinesses for farmers in the north-central region.

"Many of the rural poor continue to face economic challenges not only because they lack access to finance but because they are isolated from markets. They do not have information about crop demand and product prices, and they do not have established relationships with input suppliers or end buyers," said Brian Branch, WOCCU executive vice president and COO. "The Sri Lanka program bridges those gaps by connecting producers with market opportunities as well as financing so that they can increase their income and assets."

Shirani Somalatha, a rice farmer and Women's Co-op member in the Polonnaruwa region of Sri Lanka, is one of many who have reaped benefits from the program. In early 2009, the region was hit by a drought, substantially reducing her family's harvest. Later that year, Somalatha was elected as a member of the credit union's branch agricultural committee and received training from WOCCU and CIC Agribusinesses on farming techniques and technologies, fertilization, pest control and farm planning. She then joined the agricultural lending program to receive financing and begin implementing new farming practices on her fields.

omalatha took out a seasonal loan of 50,000 rupees (US$435) to purchase seeds for new high-yield rice varieties and pesticides and to prepare the land, harvest and process the rice from her family's two-hectare (five-acre) farm. At harvest, her new crop yielded 13,000 kilos, and with an established buyer, she received about 50% higher than the average market price. With the earnings from just one season, Somalatha was able to pay back her loan and deposit 123,000 rupees (US$1,075) into a savings account at the Women's Co-op.

For more information on WOCCU's program in Sri Lanka, visit:

World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at

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