Monday, 14 September 2020 15:39

Regional Development Bank to mainly focus on micro-finance

The Regional Development Bank (RDB), a state-owned licensed specialised bank, is now being transformed into a fully-fledged micro financial institution to assist the rural poor and alleviate poverty, Chairman of the Bank Mahinda Saliya said.

The RDB will be mainly concentrating on micro finance with the aim of rescuing the rural poor being caught up in debt trap and poverty, he said.

RDB’s mandate is to improve rural living standards by providing accessible and affordable financial services.

It is one of the 10 participating banks in ADB’s SME Line of Credit Project and has been proactively utilising ADB’s funds for enhancing Micro,Small and Medium Enterprises(MSMEs) access to finance.

Its focus on women and borrowers that are rural MSMEs is evident in its performance in the Small and Medium Enterprises (SME) Line of Credit Project; Mr. Saliya said adding that the bank is now being developed as a microfinance development specialised bank.

It provides small business loans to lower-income rural communities to assist in economic development through financial and non-financial assistance to vulnerable groups especially women in villages countrywide.

The bank’s poverty lending initiative is focused on donor-funded credit for the poor with the aim of reducing poverty and commercial microfinance for the economically-active poor, he explained.

The RDB implements ‘Isuru’ micro fiancé scheme with many low cost innovative approaches developed in line with the Grameen model (Bangladesh) and Self Help Group (SHG) methodology.

It has become a popular rural finance programme and it has been able to provide financial assistance to a large number of beneficiaries in several districts he disclosed.

In microfinance delivery under the projects, target beneficiaries were organised under SHG methodology.

They were provided with credit for commencement of Income Generating Activities along with a package of necessary services including training / awareness on financial literacy, entrepreneurship development and required skills.

Further, provision of market linkages for their produce has also been arranged where necessary.

The RDB was able to bring hundreds of low income families into the formal financial sector under the microfinance poverty alleviation programmes.

Impact evaluation studies have confirmed that 65 per cent of beneficiaries under microfinance programmes were able to cross the poverty line within 3–5 year period, he added.

-lankanewsweb-

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