Sri Lankan Credit Unions Struggle to Rebuild
A Sri Lankan credit union representative stands on the site of a coastal credit union completely destroyed by the tsunami.
As Sri Lanka begins the long process of
rebuilding after one of the worst natural
disasters in history, many credit unions are
beginning to comprehend the difficulty of the
task ahead of them.
According to L.B. Dasanayake, general manager
SANASA, the Sri Lankan credit union federation,
the extent of the damage in many regions is still
not fully understood. Reports from regional
managers continue to trickle in, says Dasanayake,
who expects a nationwide survey to be completed
by early February.
Currently, SANASA knows of over 200 credit
that have been destroyed and another 500-600
damaged, a number that Dasanayake expects to rise
as more information arrives from the remote
Eastern region and Northern Tamil-controlled
Few of the country's credit unions are
computerized, says Dasanayake, making
reconstruction an extremely difficult process.
For some, such as Matara District Union, the
process will be easier. The district office has
long had a requirement that local credit unions
send summary data monthly. This will ease the
process of reconstructing records, even for those
credit unions that have lost their books,
according to Normunds Mitzis, WOCCU Uzbekistan
project director and member of the Sri Lanka
Waterlogged accounting records dry in the sun.
Others, however, are not so lucky.
The Kaburugamawa Epitamulla Godakanola credit
union building was completely destroyed by the
tsunami, leaving little more than a pile of
rubble on the beach. "We are asking families to
bring in their passbooks, to attempt to rebuild
our records," says the credit union's
manager. "But many do not have them because they
were washed away." The manager believes that a
partial record can be created from their 2004
audit report, but says that it may take months to
The loss of furniture, safes and cash is
challenge for credit unions attempting to rebuild
after the tsunami. For many, their entire store
of cash has been swept into the sea. So much cash
has been lost by coastal credit unions, other
financial institutions and individuals that the
Central Bank of Sri Lanka has begun printing
additional currency to compensate.
The greatest risk to fragile credit unions,
however, may not be from the physical damage they
have sustained. Already, local government
officials and borrowers are asking the credit
unions to completely forgive all loans to coastal
"There is pressure to write everything off,"
Nimal Martinus, regional director at a Norwegian
NGO involved in relief efforts in Sri Lanka.
This, says Martinus, would be extremely
challenging to SANASA and other lenders in the
area. "All institutions should be trying to
restructure loans in response to the needs of
their clients, but the loans should not be
Individuals or organizations wishing to
the Tsunami Disaster Relief Fund can make a
contribution through the World Council of Credit
Unions' Worldwide Foundation or the National
Foundation (US). Information can be found on both
websites www.woccu.org or
To date, WOCCU and NCUF have received nearly
$300,000 from credit unions and credit union
partner organizations to support rebuilding the
devastated South Asia credit union movement.
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 more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 105 countries serve 217 million people. Learn more about World Council's impact around the world at www.woccu.org.
Phone: (608) 395-2000