During the period of 1988/89 Sri Lankan society experienced island-wide youth unrest mainly due to unemployment & acceleration of poverty. HNB, having realized the importance of this social & economic upheaval, initiated ‘Gami Pubuduwa’ (Village Awakening) programme in May 1989 with a view of extending bank’s assistance to the rural youth in exploring self employment activities.
Gami Pubuduwa Scheme was formulated not only with a view of extending credit facilities, but also to give a package of banking facilities. The main ingredients of the scheme constitute of rural savings mobilisation and social development while extending credit.
The Bank has appointed field officers known as 'Gami Pubudu Upadeshaka' (GPU) to closely associate with the rural community, identify their strengths & weaknesses and make suitable financial proposals to promote successful micro entrepreneurs.One of the strongest factors is the higher collection performance, apart from the overall evaluation & monitoring of the scheme, the relationship the GPU field officer maintains with his borrowers.
During the period of last 19 years over 70,000 small loans have been sanctioned amounting to approx. Rs 4 Bn. Gami Pubuduwa program has touched the lives of over 500,000 people directly & indirectly all over the island, giving them better opportunities for employment, education, and success.
Furthermore, bank has involved in organizing trade fares to establish a market for the products manufactured by Gami Pubuduwa clients and has introduced modern technology by linking expert organizations with borrowers to improve product quality. Expansion of small industries has also created more employment opportunities in rural areas.
With the completion of 19 years, 'Gami Pubuduwa' microfinance scheme has now become one of the successful microfinance programs implemented by a commercial bank. This scheme has been highly acclaimed by several local and international agencies. With the passage of time, the bank has now tailored the scheme not only to ensure that it meets with social and economic needs of the country but also to ensure the scheme continues as an economically sustainable project of the bank.
The bank in collaboration with Savings Banks Foundation for International Cooperation, Germany (SBFIC), launched a microfinance program in the Tsunami affected areas in Sept 2005. This scheme provided financial assistance to commence or expand income generating activities in Tsunami affected areas.
Gami Pubuduwa' microfinance scheme provides assistance for any income generating self employment activity up to Rs 1 Mn with a maximum repayment period of 4 years. There are 108 'Gami Pubuduwa' rural banking units operating throughout the country where most of the units are stationed in rural areas of the country.
Present portfolio of Gami Pubuduwa scheme stands at Rs 2 Bn serving 15,000 clients throughout the country. Apart from micro lending, at present there is a portfolio of nearly Rs 1 Bn rural deposits mobilized by the scheme.
“Micro Insurance Product under Gami Pubuduwa Scheme”
The bank together with HNB Assurances Ltd has introduced a “Micro Finance Insurance scheme” as the newest value addition to the GPU concept. This is the first of its kind in Sri Lanka and has been designed to cover both life & liability of borrowers
Any micro entrepreneur, who wishes to obtain credit facilities under Gami Pubuduwa scheme will be eligible for the product. A notable feature of the scheme is that the bank would bear 50% of the cost of single premium on behalf of the borrowers.
In the event of death or total permanent disability of a borrower, HNB Assurance Ltd will settle the outstanding due of the loan to the bank and also pay the sum assured to nominee/bank as life cover.
Currently many micro entrepreneurs are facing difficulties in providing acceptable guarantors for their credit facilities. However, with the introduction of the proposed insurance scheme borrowers would be more comfortable of finding guarantors. Further the dependants of the borrowers too will be relieved in the case of any eventuality as the burden of the loan liability would be taken care of by the Insurer.
One of the salient features of the scheme is that applicants do not require undergoing any medical tests if their age is less than 55 years. This would entail almost all the micro entrepreneurs to obtain the proposed policy by just filling a simple proposal form.
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