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Performance Report ‐ 2011

Department of Development Finance

Department of Development Finance > Performance Report 2011

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Content

Page

Numbers

1. Vision, Mission and Main Functions 2‐3

2. Performance During 2011

2.1 Overview 4

2.2 SME Sector 4‐17

2.3 Microfinance Sector and Rural Economy 17‐20

2.4 Other 20

3. Establishments and Administrations

3.1 Cadre Position 21

3.2 Organization Chart 22

3.3 Staff Information 23‐24

3.4 Local Training Courses, Study Tours & Seminars 25

3.5 Foreign Training Courses, Study Tours & Seminars 26

4. Financial Information 27


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Vision

“ To become the key government agency as facilitator

to develop Small and Medium Enterprises (SMEE),

Micro Enterprises, Banking Sector and Financial Markets

in order to accelerate the growth of the economy.”

Mission

“ Formulate appropriate policies and strategies to

mobilize financial resources for the development of SME sector,

micro enterprises sector, Banking sector and

improvement of the financial markets through

necessary intervention with the relevant stakeholders.”


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Functions of the Department

Formulate appropriate polices, programmes and strategies for the development

of the financial sector and government sponsored financial assistance schemes.

Identify key issues and provide solutions to the development of small and

medium enterprise and micro finance sectors.

Facilitate enacting legislations for banking, insurance, small and medium

enterprise and the micro enterprises.

Formulation, implementation and follow up action on budget proposals and

conducting empirical research to facilitate policies.

Facilitate in policy formulation to solve current issues arises in time to time in the

domestic economy.


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2. Performance During 2011

2.1 Overview

SME sector dominates agriculture, plantation, construction manufacturing, trade and other services. Recognizing the importance, the government has developed various strategies through consultation based on consumer/users quality assurance on imports, innovative financing and credit facilities, infrastructure facilities, skills development, research and technology etc. SMEs contribution to total Gross Domestic Product increased from 40 percent in 2010 to 52 percent in 2011.1 The microfinance sector has penetrated the rural areas with “Divi Naguma Programme” designed and implemented by the Ministry of Economic Development to energize the backyard economy and improve the living standard of people and also food security at family/household level.

The total credit facility used by the microfinance sector is Rs. 372 billion2 during the year 2011 from the banking sector and all microfinance institutions. The self employed traders in the urban informal sector were provided with credit facilities to purchase the small trucks to improve their marketability in urban areas through the state banks namely, the Bank of Ceylon and the People’s Bank with the exposure limit of Rs. 460 million. This excludes the microfinance circulated among the rural and estate economy by the informal traditional means. The fertilizer subsidy programme has provided stimulus to SMEs in primary agriculture through cost reduction at a time fertilizer cost has drastically risen. Imposition of CESS on seasonally harvested agricultural product, provision of credit, marketing and reasonable prices have helped production growth in the agriculture sector.

2.2 SME Sector

The vision of the Government of Sri Lanka is to double the country’s per capita income to US$ 4,000 by 2016 and consolidate Sri Lanka as an emerging economy. This requires a growth rate of around 8 percent to be maintained over the years. The budget 2012 has therefore, assigned high priority to the SME sector to strengthen SME as backbone of the economy. Steps have been taken by the Government to form an entrepreneurial development environment by introducing appropriate policy reforms and providing greater incentives for SMEs. More importantly, the Government’s initiative in collaboration with development partners such as the World Bank (WB), International Fund for Agricultural Development (IFAD), Asian Development Bank (ADB), United Nations Development Programme (UNDP), the USA, Japan, Germany and India, is a joint effort to revitalize the SME sector.

Recent international experience shows that the creation of employment opportunities is critical for faster recovery in post conflict countries. The opening of economic opportunities in the conflict affected and emerging regions is the effort of government to expedite the recovery process and to expand the scope of the SME sector considerably, to increase income opportunities. As a result, the unemployment rate has declined to 4.2 percent in 20113 from 7.2 percent in 2005. However, improvement of access to finance is the main driving force to promote entrepreneurship activities.

1 Data collected from Bank and a research conducted by the Dept. of Development Finance, to estimate the SME contribution 2 Data from the Microfinance Association and compiled by the Department of Development Finance 3 Annual Report 2011, Central Bank of Sri Lanka


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Improve Access to Finance

BOX 1 INVESTMENT FUND ACCOUNTS ESTABLISHED IN 2011 THROUGH TAX REDUCTION OF FINANCIAL INSTITUTIONS

In line with the budget 2011, steps were taken by all banks to setup Investment Fund Account (IFA) from the reduction of income tax on profit from 35 percent to 28 percent, through provisions in the Inland Revenue Act. At the end of December 2011, Rs. 12 billion was available under the IFA. As envisaged by the government, there are five banks that have more than one billion in IFA in 2011, have taken initiatives to provide funding for road sector and SME development programmes.

Table 1

Name of the Bank Amount in IFA (Rs. Million)

People’s Bank 1,897.70

National Savings Bank 1,535.00

Bank of Ceylon 1,484.10

Commercial Bank of Ceylon Plc

1,194.30

The Hongkong & Shanghai Banking Cooperation Ltd.

902.70

Source: All Banks

The IFA is now becoming a strong pool of resources that will enable banks to venture into long term lending during next two years in order to provide necessary stimulus for the growth strategies set out by the Government Policy Framework of “Mahinda Chinthana Vision for the Future”. The progress of the IFA are as follows;

32 percent of the total of Rs. 12 billion, equivalent to Rs. 4 billion has lent to the SMEs

The remaining 62 percent (Rs. 7 billion) of the IFA has invested in the Government Securities and the People’s Bank and Bank of Ceylon have committed for financing for four road rehabilitation projects

Rs. 720 million earmarked for investment loans, has not been utilized and remaining with the banks (6 percent of the total 12 billion).

The Hatton National Bank has lent Rs. 951 million more than the fund collected during year 2011, which is a positive step towards achieving the objectives of IFA

The budget proposal for 2012 has further strengthened the IFA by reducing the prevailing income tax rate from 28 percent to 24 percent for the interest income which is estimated the increase of more than Rs. 16 billion in 2012. The special SME bank branches established utilizing IFA, will support SMEs providing guidance for marketing, financial management, changing energy by renewable sources, increasing productivity and competitiveness to compete with product of other countries in order to depart from protective environment.

SME sector Programmes Small and Medium Enterprise Regional Development Project Small and Medium Enterprise Regional Development Project (SMERDP) was to redress prevailed regional imbalances and enhance the growth and development of regional SMEs by providing


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access to medium to long‐term funds, and encouraging Commercial Banks (PCBs) to proactively finance opportunities among regional SMEs. The Loan Agreement for this purpose was signed on 18th December 2007 between the Government and ADB with specific outcome of accelerated development of the SME sector outside the Western Province through increased output and employment generation. The total cost of the project is US$ 89 million of which 56 percent is provided by ADB and 19 percent and 25 percent are contributed by PCBs and SMEs respectively. The project was implemented through DFCC Bank, Commercial Bank, National Development Bank and the Sampath Bank. The total cost of approved loans under this programme is Rs. 8,298 million and of that ADBs contribution is Rs. 4,668 million. PCBs and SMEs contribute Rs. 1,556 million and Rs. 2,075 million respectively. From the ADB’s contribution as refinance facility, Rs. 4,345 million has already been released to the PCBs up to the 31st December 2011 and has extended the project completion date to 30th June 2012, in order to replenish the committed loans given by the PCBs up to 30th December 2010. The details of the utilization of ADB funds by banks are given in Table 2.

Table 2

Utilization of ADB Funds by Banks ADB Funds

Allocation (Mn.)

Released up to 31.12.2011 (Mn.)

Commitments to be released (Mn.)

Total (Mn.) Bank

US$ Rs. US$ Rs. US$ Rs. US$ Rs.

%

Sampath 10 1,070 6.55 732.22 0.52 60.84 7.07 793.06 71.0

Commercial 15 1,605 11.89 1,328.27 1.58 184.86 13.47 1,513.13 89.8

DFCC 15 1,605 12.99 1,457.77 0.03 3.51 13.02 1,470.79 86.8

NDB 10 1,070 7.38 826.58 0.00 0.00 7.38 826.58 73.8

Total 50 5,350 38.81 4,344.84 2.13 249.21 40.94 4,603.56 82.0

Source: Sampath Bank, Commercial Bank, DFCC & NDB Progress for the year 2011 A total of US$ 12 million of ADB funds has been released to the SMEs by all four banks during the year 2011. 82 percent of allocated funds have been utilized as at 31st December 2011. The details of loan released by the PCBs during the period 2008 to 2011 and the amount to be released in 2012 are shown in the Chart 2.


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Progress by Sectors The agriculture sector dominates from the loans approved by providing 408 loans amounting to Rs. 2,205 million followed by the service sector. However, out of the total fund provided, the agriculture sector has led by granting around 38 percent of the total funds and followed by the service sector around 33 percent as shown in the Chart 3. Considering the size of loan granted, the agriculture sector led by granting highest average loan amounting of Rs. 5.4 million followed by the plantation sector amount to Rs. 5.05 million.

Small and Medium Enterprise Development Facility Project Small and Medium Enterprise Development Facility Project (SMEDeF) commenced in 2010 aiming at improving access to finance (including term finance) for SMEs affected by the global financial crisis. The total value of the project is US$ 57.4 million and financed by a loan facility of International Development Association of World Bank for a period of three years. The Project consists of two components:

(a) Financing and risk sharing facility (b) Policy and capacity enhancement for SME banking

Outcomes in 2011

Agreements were signed with eight banks (Participatory Financial Institutions – PFIs) to implement the line of credit facility.

The total allocation for the line of credit is Rs. 3,055 million from which Rs. 818.5 million, 27 percent, has been disbursed by PFIs during 2011.

The highest value of loan disbursement has been achieved by the Development Finance Corporation of Ceylon (DFCC) amounting Rs. 182 million (22 percent) followed by Bank of Ceylon and Hatton National Bank by disbursing Rs. 174 million (21 percent) and Rs. 141 million (17 percent) respectively (Table 3).

The total number of loans approved as at December 31st, 2011 is 250 from which 90 loans, i.e. 36 percent, were granted during 2011. The highest number of loans, 23 loans, has been granted by the People’s Bank. Bank of Ceylon has granted 22 loans.

In the context of size of loans, 63 percent of the approved loans of 250 is below Rs. 5 million.


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In terms of the regional distribution of loan disbursement Colombo District accounts for the highest loan disbursement amounting Rs. 186 million (22 percent) followed by Kurunegala District by disbursing Rs. 164 million (20 percent) (Chart 4).

Under the capacity enhancement, 1,290 loan officers and 496 entrepreneurs have been trained.

Tourism sector accounts for Rs. 247 million, 30 percent of the total loan disbursement, while agro processing industries has been disbursed Rs. 167 million which is 20 percent of the total disbursement for 2011.

Table 3 Loan Disbursement by the Participatory Financial Institutions

As at 31.12. 2011 Bank

No. Rs. Million

Regional Development Bank 1 2.00

Commercial Bank 1 37.00

National Development Bank 4 85.00

Hatton National Bank 7 141.00

DFCC Bank 15 181.86

Sampath Bank 17 64.70

Bank of Ceylon 22 174.30

People's Bank 23 132.60

Total 90 818.46

Source: SMEDeF Project National Agri‐business Development Programme The policy framework of the government recognises the public and private partnership and private sector development in agriculture in order to resolve problems faced by the farmers. A popular approach which is the creation of public companies with share capital contribution by the Government and stakeholders will be introduced through the National Agri‐business Development Programme to promote public private partnership.


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Financing Agreement for the implementation of National Agri‐business Development Programme was signed between the government and the International Fund for Agricultural Development (IFAD) on 23 February 2010, at a cost of US$ 22 million during the period 2010 to 2016. The objective of this programme is to assist smallholder farmers and the landless, especially the youth by increasing their incomes through participation in the marketing chain development. This programme is being implemented by the Regional Development Department, Central Bank of Sri Lanka under the supervision of the Department of Development Finance, Ministry Finance and Planning. The programme components are:

I. Marketing Chain Development and Linkages

II. Microfinance and Training of Youth

III. Programme Management and Policy Support The first component will be national in scope but exclude the Western Province and urban areas, and have two approaches. The first approach is private sector ‐ led marketing chain development which focus on fruits and vegetables, spices and spices based products, cereals and food crops, cashew and cashew based products and dairy and milk products. The companies who wish to establish value chains have to come up with business plans and to finance 51 percent of the plan. Farmers will have to contribute between 2‐5 percent and the balance will be financed on equity basis under the programme. Four project proposals have been approved for funding under the first approach. The second approach is community based organizations (CBOs)‐led marketing chain development for producer groups. The CBOs will have to contribute at least 20 percent of the capitalization of the producer groups while farmers will contribute 2‐5 percent of the balance, 30 percent is raised in the form of long term debt and 40‐45 percent will be financed out of the programme on equity basis. The funds provided under the programme on equity basis will be held by the Board of Trustees. Three project proposals have been approved for funding under the second approach. The second component of microfinance and training of youth will be implemented in the districts of Ampara, Kegalle, Kurunegala, Puttalam and Ratnapura to provide financing to the landless, women groups, and especially 2,200 youths to commence income generating activities. SME Sector Development Programme Since the development strategies focus more on SME development to fulfill the desired economic growth of more than 8 percent, the Government requested Germany to provide assistance to develop the SME sector. Accordingly, Germany has agreed to provide Euro 2.5 million for the implementation of the SME Sector Development Programme. The Exchange of Note for this purpose was signed on 15th November 2011 between the two Governments. The objective of this programme is to improve the financial and non‐financial pre‐conditions required for the development of SME sector. The main components of the programme are: i Development of a coherent and consistent SME policy ii Improve access to finance iii Improve access to technology/ market


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Agro Livestock Development Loan Scheme The Agro Livestock Development Loan Scheme (ALDL) commenced in March, 2008 to empower the small dairy farmers with their capital needs and thereby enhancing the local milk production. The scope of the scheme was expanded in 2009 and 2010 by including activities of establishment of cooling facilities and block ice manufacturing plants and activities related to the poultry farming. A total of eleven commercial banks are engaged in this scheme as Participatory Financial Institutions (PFIs) and the loans are disbursed through PFIs. The Government provides the interest subsidy at 6 percent per annum for small farmer borrowers engaged in dairy and agro products and 2 percent per annum for private investors who purchase liquid milk direct from small farmers. The expected amount to be disbursed among the target beneficiaries under the scheme is Rs. 5,000 million. However, by the end of 2011, the value of loans granted under the scheme is only 2,037 million which is equivalent to 41 percent of the total allocation. The interest subsidy granted by the Government during 2011 is Rs. 41 million increasing the total amount granted to Rs. 94 million. The project period has been extended until 30th June 2012.

Table 4 Progress of Agro Livestock Development Loan Scheme, 2008 ‐ 2011

Small farmer Borrowers Investors in the Private Sector

No. of Loans Granted

Amount Released (Rs. Million)

No. of Loans Granted


Province

2011 Total up to Dec 2011




Western 282 906 47.09 134.76 37 93 8.98 398.86 Central 663 2,572 62.49 200.33 10 41 3.50 50.46 Eastern 873 1,678 151.69 279.04 3 77 1.74 62.63 North Central 243 1,037 28.80 112.85 0 15 0.00 2.40 North Western 655 2,599 75.79 247.46 6 818 44.04 126.86 Northern 203 649 38.52 88.16 0 1 0.00 10.00 Sabaragamuwa 93 362 10.05 41.16 0 17 0.00 3.59 Southern 293 700 50.23 99.65 16 25 110.55 115.83 Uva 113 739 13.42 60.13 0 23 0.00 2.46

Total 3,418 11,242 478.08 1,263.54 72 1,110 168.81 773.09

Source: Regional Development Department, Central Bank of Sri Lanka Small farmer borrowers have benefited from this scheme since its inception. Around 91 percent of the total loans granted have been obtained by the small farmer borrowers during the period 2008 – 2011. The value of the loans granted is Rs. 2,037 million which is 62 percent of the total amount released. The small farmer borrowers have obtained 98 percent of the loans granted with 74 percent of total disbursement during 2011 as well. Under this scheme the number of beneficiaries, both small farmer borrowers and private sector investors, has increased by 9 percent compared to 2010. Regional distribution of the borrowers shows that the highest number of borrowers are from Eastern Province while the highest amount of disbursement of Rs. 161 million is in the Southern Province during 2011. Further, nearly half of the total disbursement shares within the Eastern and Southern Provinces.

Eleven Commercial Banks are involved as PFIs in this scheme. Compared to other banks, Bank of Ceylon shows a higher performance on issuing loan amount within last four years. It has issued Rs. 565 million worth of loans for 2,166 beneficiaries during this period. It represents 28 percent of total amount disbursed and 18 percent of total beneficiaries. Nevertheless, Regional Development Bank shows the highest performance of creating beneficiaries of this scheme. It has


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created 4,523 numbers of beneficiaries in last four years. During 2011, the People’s Bank has issued 1,180 loans to the value of Rs. 184 million for small farmer borrowers while the Union Bank has issued Rs. 122 million worth of loans for private sector investors against the other PFIs.

Table 5

Sector Wise Progress Agro Livestock Development Loan Scheme ‐ 2011

Item No. of Loan Granted


Purchase of cows, heifers & equipment for dairy project and Construction of cattle sheds

3,268 451.43

Processing of liquid milk & production of milk 63 122.17

Agro‐based & agro‐related processing industry 7 33.64

Establishing cooling facilities 0 0.00

Establishing block ice manufacturing plants 1 3.00

Small poultry farming 150 26.65

Processing industries‐poultry 1 10.00

Enhancing storage facilities in the process 0 0.00

Total 3,490 646.89

Source: Regional Development Department, Central Bank of Sri Lanka During the year 2011, the performance of the banking sector in issuing loans for private sector investors is not at satisfactory level compared to issuing loans for small farmers. Further, all PFIs have issued only 72 loans, 2 percent of the total loans issued, while disbursing 26 percent of the total amount released in that period. However, considering the issuance of loans under this scheme, the state banks show a better performance against the private commercial banks. In the previous year, the state banks have issued Rs. 372 million worth of loans which is 58 percent of the total disbursement to the borrowers. New Comprehensive Rural Credit Scheme Enhancing the rural sector production and uplifting the living standard of rural community the New Comprehensive Rural Credit Scheme (NCRCS), was continued during 2011 as well by providing credit facility for cultivation. Loans given for cultivation purposes under the Scheme are mostly utilized by small farmers. It is revealed that the NCRCS has contributed significantly towards the reduction in rural poverty. The NCRCS consists of two credit programmes, namely:

Loans for cultivation of paddy and other subsidiary food crops and production of seed and planting material on a commercial scale; and

Loans for purchasing agricultural produce under the forward sales contracts. However, the credit facility for purchasing agricultural produce under the forward sales contracts was removed from the banking system based on the evaluation of the sustainability and optimization of benefits carried out in 2010. The credit facility for cultivation is being implemented at a concessionary interest rate of 8 percent by Participatory Financial Institutions (PFIs), out of their own funds. 33 major crops including paddy, chili, onion, oil seeds, root and tuber, vegetable and other are eligible to receive loans under this scheme. The Treasury provides 6 percent of interest subsidy to PFLs. The operational instructions of the scheme were revised in September 2011 confining to short term crops of maximum of 270 days. In 2011, the Treasury provided Rs. 206 million of interest subsidy to PFIs for the cultivation loans they have granted. During 2011, the demand for loans under NCRCS has been increased due to economic situation and peaceful environment in the country. Compared to 2010, the number of farmers benefited


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under NCRCS has increased to 98,593 by 37 percent in 2011 while the total loan disbursement has increased from Rs. 3,570 million in 2010 to Rs. 6,419 million in 2011 by 80 percent. The main reason for this increase is granting more credit facilities to the Northern Province. The farmers in the Northern Province have the broader access to credit facilities after the 30 year prolonged war. It is further corroborated by the highest loan disbursement of Jaffna District, which is 22 percent of the total loan disbursement of Rs. 6,419 million in 2011. Further, no loan was granted for Killinochchi in 2010 whereas 5,319 loans have been granted utilizing Rs. 754 million in 2011.

Considering the regional distribution of the beneficiaries and the loan disbursement, the highest numbers of beneficiaries and the loan disbursement recorded in the Northern and the North Central Provinces respectively compared to other provinces (Chart 5). In the Northern Province, the numbers of beneficiaries increased by 157 percent and the amount of loan disbursement also increased by 292 percent against the last year. The numbers of beneficiaries and the amount of loans disbursed have increased by 17 percent and 28 percent respectively in North Central Province.

Table 6 Loans Granted under NCRCS in 2011 ‐ Bank Wise

No. of Loans Amount Released

(Rs. Million) Name of the Bank

2010 2011

Growth in %

2010 2011

Growth in %

Bank of Ceylon 24,820 33,588 35 1,315.60 2,381.70 81

People's Bank 13,715 20,267 48 537.50 1,049.00 95

Commercial Bank 718 4,504 527 79.10 562.20 611

Hatton National Bank 7,120 11,157 57 466.30 908.60 95

Sampath Bank 24 58 142 1.90 3.30 74

Seylan Bank 999 831 ‐20 65.90 61.60 ‐7

Union Bank 69 874 1,166 3.50 83.20 2,277

Regional Development Bank 24,524 27,271 11 1,100.20 1,365.20 24

Lankaputhra Development Bank 2 43 2,050 0.20 4.30 2,050

Total 71,991 98,593 3,570.20 6,419.10

Source: Regional Development Department, Central Bank of Sri Lanka

Among nine Participatory Financial Institutions (PFIs) of this scheme, Bank of Ceylon has issued high amount of loans with more beneficiaries. It represents 81 percent increase of loan amount against 2010. Regional Development Bank and People’s Bank have issued Rs. 1,365 million and


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1,049 million respectively (Table 6). The total amounts of these two banks represents 38 percent of the total loan amount released in 2011. In term of crop distribution, paddy sector has received the highest value of loans with the highest number of beneficiaries during 2011. Accordingly, paddy sector has attained 64 percent of the total loan disbursement during 2011. It was also recorded the highest cultivated land area compared with other crops cultivated under this scheme.

Stimulated Financing for Agriculture Sector In line with the “Mahinda Chinthana” policy framework, financing the agriculture sector was mainly focused towards the achievement of the multiple goals such as; ensuring food security, establishing a fair price for the harvest of the farmers by harmonizing the market, expanding the fertilizer subsidy to all crops in order to reduce the cost of production of the farmers, minimizing the post harvest losses and encouraging export of crops. The income derived from the cultivation of certified seed and planting material has been exempted from tax from the year 2011 itself in order to encourage private sector engagement in such activities. Fertilizer Subsidy Programmes Paddy Sri Lanka has been traditionally an agriculture based economy presently looking towards excessive production in paddy beyond self sufficiency. The agriculture sector contributes 11.2 percent to GDP employing 32.5 percent of total labour force4. Paddy takes a prominent place among all other crops since rice is not only the staple food of the country but also its contribution towards livelihood activities. In 2011, the paddy production was 3.8 million metric tons cultivated in 1.2 million ha.

The government expenditure on fertilizer subsidy for paddy is significant. Taking into account the paddy production and the expenditure for fertilizer subsidy for paddy in 2011 the Government has spent Rs. 9.54 on fertilizer to produce a kilo gram of paddy.

4 Labour Force Survey – Annual Report 2010, Department of Census & Statistics


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Table 7 Comparison of Subsidized Price and Market Price of Fertilizer for Paddy, 2010 Yala ‐ 2011/12

Maha

Season Fertilizer Type

Average Market Price /50 kg bag

(Rs.)

Subsidized price of 50 kg bag (Rs.)

Subsidy for 50 kg bag

(Rs.)

Subsidy as a % of Market Price

Urea 2,708 350 2,358 87

TSP 2,969 350 2,619 882010 Yala

MOP 3,392 350 3,042 90

Urea 2,481 350 2,131 86

TSP 2,790 350 2,440 872010/11 Maha

MOP 3,298 350 2,948 89

Urea 2,951 350 2,601 88

TSP 3,099 350 2,749 892011 Yala

MOP 3,245 350 2,895 89

Urea 3,097 350 2,747 89

TSP 3,267 350 2,917 892011/12 Maha

MOP 3,256 350 2,906 89

Source: National Fertilizer Secretariat

BOX 2 REVIVAL OF PADDY SECTOR IN 2011

The flood disaster in 2010/11 Maha season caused a considerable damage of over 50 percent of the harvest. However, the agriculture sector was able to recover within one cultivation season due to Government intervention. The Cabinet has approved the following measures:

Provision of free seed paddy amounting to five bushels maximum per ha

Free provision of selected minor crops per 0.2 ha

Financial allocations of Rs. 4,000/‐ per 0.4 ha up to a maximum of 1 ha per farmer for re‐cultivation of land

Further arrangements were made with state banks to extend the repayment period for loans obtained for cultivation purposes

All Other Crops Extension of fertilizer subsidy programme for all other crops is a significant take off in agricultural and plantation sector. It opens the way for the farmers to shift from cultivating one crop to multiple crops. Until the declaration of subsidy programme for all other crops on 6th May 2011, only paddy, coconut and tea sectors received the fertilizer subsidy. According to the new scheme;

A 50 kg bag of any type of straight fertilizer of which market price is higher than Rs. 1,200/‐ to be sold at Rs. 1,200/‐

A 50 kg bag of any type of straight fertilizer of which market price is less than Rs. 1,200/‐ to be sold at its price

A 50 kg bag of mixed fertilizer to be sold at Rs. 1,300/‐

Existing Fertilizer Subsidy Programme for paddy to be continued unchanged The new fertilizer subsidy programme removed all the approvals and issues pertaining to fertilizer distribution at the several layers of government procedures allowing users to purchase


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their fertilizer requirement from open market at subsidized price of Rs. 1,200/‐. Compared to the market price of the fertilizer types, the subsidy granted by the government varies from 28 – 83 percent of market price for 50 kg bag. Tea fertilizer subsidy, implemented until May 2011, was introduced in 2009 for tea small holding sector in order to strengthen the tea export sector which was adversely affected by the global economic recession. A 50 kg bag of mixed fertilizer was supplied at a subsidized price of Rs. 1,000/‐. There are about 370,000 smallholders in the tea sector cultivating in 118,000 ha benefited from this programme. Tea smallholding sector consisting of plots of land less than 50 acres contributes 70 percent to the total tea production. When the tea subsidy was replaced by the fertilizer subsidy for all other crops, 35,436 Mt of mixed fertilizer, of which value of the subsidy is Rs. 1,507 million, have been provided for the tea smallholding sector for the period, January – May 2011. The average market price of a 50 kg bag of mixed fertilizer was Rs. 3,135/‐ whereas the subsidized price was Rs. 1,000/‐. Accordingly, the subsidy granted by the government is 68 percent of the market price. Fertilizer subsidy for coconut, implemented until May 2011, was approved by the Cabinet of Ministers in December 2010 considering the high prices of coconut prevailed in the country during that period. The lowest coconut production for the last decade, 2,317 million nuts, was recorded in 2010, which led the Government to take measures to increase coconut production. Under the fertilizer subsidy programme for coconut, unmixed fertilizer, Urea and MOP 50 kg bag each was provided at a subsidized price of Rs. 1,000/‐. Considering the average market price of Urea and MOP for 50 kg bag issued under this scheme, the subsidy granted by the government is around 70 percent of the market price. 9,199 Mt of MOP and 5,117 Mt of Urea were provided to coconut cultivators with a cost of Rs. 740 million for subsidy payment until this scheme was replaced by the fertilizer subsidy for all other crops. Extension of fertilizer subsidy for all other crops created the opportunity for private fertilizer companies to take part in the fertilizer subsidy programme. With the declaration of the new scheme, fertilizer stocks as at 6th May 2011 with the private fertilizer companies were audited to grant subsidy payment. The subsidy payment for fertilizer stocks with fertilizer companies was Rs. 2,200 million. Since all the fertilizer types come under the subsidy scheme a formula was developed with the participation of the representatives of fertilizer companies, officials of the Treasury and the Ministry of Agrarian Services and Wildlife to decide the commercial price of fertilizer. Further, a committee set up under the Ministry of Agrarian Services and Wildlife with the participation of relevant government officials and representatives from the state and private fertilizer companies meets quarterly and decides the commercial price of fertilizer for the following quarter based on the formula. Taking into account the fertilizer subsidy for paddy, tea, coconut and all other crops, the payments made and the committed of the Government amount to Rs. 48,434 million 2011 which is 0.74 percent of GDP. Smoothing Farmer Incomes Paddy Government is concerned on smoothing the farmer’s income and make arrangements to purchase the marketable surplus of the paddy harvest at a fair price. Purchasing was carried out by the Paddy Marketing Board (PMB), Cooperative Societies and District Secretaries while providing room for private sector to purchase paddy at the government certified price of Rs 28/‐


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per kilo gram of Nadu paddy and Rs 30/‐ per kilo gram of Samba paddy. Table 8 illustrates the information on paddy purchasing. PMB was mainly financed through Treasury Funds, pledge loans granted by state banks and finance from Agro Trust Fund for paddy purchasing activities other than their own over draft facilities. State banks granted pledge loans for paddy purchasing to private sector as well. The exposure limits were set for those pledge loans by the state banks in consultation with the Treasury in 2011. The limit of “Revolving fund for sale and purchase of farmer products” which is operated by the Department of Treasury Operations of the Ministry of Finance and Planning was augmented to provide those Treasury Funds.

Table 8

Paddy Purchasing by State Sector and Private Sectors, 2005 – 2011

Year Paddy

Marketing Board (Mt)

District Secretaries

(Mt)

Cooperative Societies (Mt)

Private Sector (Mt)

Stocks held by Farmers for Future Selling (35%) (Mt)

2005 0 64,788 1,671 2,143,492 1,036,239

2006 0 62,921 1,480 2,208,830 1,068,691

2007 0 1,338 3,068 2,124,141 1,002,534

2008 43,122 395 2,411 2,589,723 1,239,187

2009 83,810 410 3,153 2,395,747 1,168,226

2010 115,226 6,241 19,883 2,780,294 1,378,976

2011 74,844 12,650 1,870 2,518,886 1,219,562

Source: Compiled by the Dept. of Development Finance information obtained from the relevant institutions

The Treasury reimbursed the interest component of the pledge loans given to the PMB due on 31st August 2011 which was amounting to Rs. 365 million. Initiative has been taken to export stock of excess paddy to Somalia and Heity as donation out of the paddy stored with Paddy Marketing Board. Soya Beans Locally produced soya beans are mainly used for production of “Thriposha” “Samaposa” and similar type of food. Government was compelled to intervene through Paddy Marketing Board in 2010 in purchasing soya beans from farmers to assure a fair price of Rs. 85/‐ per kilo gram in order to harmonize the market. This task has been regulated in 2011 with the intervention of the Regional Development Bank to purchase the excess harvest totaling to 2,000 Mt from farmers through pledge loans. The purchased stocks were supplied to Thriposha Programme at Rs. 95/‐ which discouraged the soya bean suppliers who bought soya beans at lower prices (Rs. 40/‐ per kilo gram) from farmers and supplied to Thriposha Institute through tenders at prices higher than Rs. 95/‐ receiving unfair gains. Soya bean is imported in the form of Soya bean meal for animal feed production. Poultry feed industrialists were given tax exemption to import machinery in order to encourage them to set up soya oil extraction plants so that the import of soya bean meal would be reduced while saving foreign exchange on imports. Maize Maize is a main ingredient for animal feed and Thriposha production. The rest is mainly used for human consumption as corn. Annual maize consumption is 228,000 Mt of which 200,000 is consumed by the livestock sector. Actual maize production was 135,156 Mt in 2011 while maize imports were 3,362 Mt. Compared to import of 9,571 Mt of maize in 2010 imports in 2011 shows a 185 percent decrease. Licenses were issued to import maize to fulfill the shortage of maize that emerged as a result of the flood disaster. Strict conditions were imposed to discourage excess


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imports since it would adversely affect the maize price in local market for the following seasons. Accordingly the importers were bound to purchase maize locally in the subsequent seasons, both in 2011 Yala and 2011/12 Maha, twice the quantity of maize imported. Licenses issued to private parties amounting to 18,500 Mt by 31st August 2011. But the total amount was not imported. However the period of the permits issued for maize imports were extended till 30th September 2011 since the local market could not meet the total demand.

2.3 Microfinance Sector and Rural Economy Many of countries and development agencies use microfinance as a tool to address the socio–economic revival of the poor. In Sri Lanka, the microfinance sector has been an effective instrument for reduction of poverty of Sri Lankan rural community due to its contribution to the growth of rural sector. It also satisfies the financial needs of the low income urban community including informal sector micro entrepreneurs who do not have direct access to formal banking system and financial institutions. “Mahinda Chanthana Development framework” has therefore, assigned high priority to the microfinance sector, stating that “Sri Lanka will have a strong microfinance sector in the next decade”. Different authorities are responsible for the supervision of the different types of microfinance institutions and there are large numbers of microfinance institutions that are operating in the country which are not subject to any supervisory/regulatory institutions or framework. However, the outreach and financial performance of the MFIs is varied according to the objectives and weight given to the microfinance sector. The major MFIs have 23,129,815 depositors with 8,768,391 of borrowers. The total borrowing of the microfinance sector is Rs. 107 billion in 2011 as shows in Table 9.

Table 9 Progress of Major Microfinance Institutions in 2011

Source: Survey of Department of Development Finance * Up to 2010 The formal banks have disbursed Rs. 92 billion loans to the microfinance sector for implementing various micro credit programmes. Bank of Ceylon and Sanasa Development Bank and Hatton National Bank (HNB) have disbursed outstanding amount of small loans of less than Rs. 2 million.

Microfinance Institute

No of Depositors

No of Debtors

Total Capital (Rs. Mn.)

Total Deposits

(Rs. Mn.)

Total Borrowings (Rs. Mn.)

Total Assets (Rs. Mn.)

Total Investment (Rs. Mn.)

Loan Advances (Rs. Mn.)

Loan Balances (Rs. Mn.)

Regional Development Bank

3,980,038 1,060,744 4,555 46,154 4,557 59,408 9,344 46,114 47,194

Samurdhi Authority

5,487,914 4,441,834 5,196 41,131 68,280 47,323 42,767 68,281 13,407

Department of Co‐operative Development

12,736,456 2,151,750 1377 76,378 29,395 67,585 32,946 20,417 30,781

Department of Agrarian Development

157,472 406,975 448 208 184 1042 395 3,823 472

SEEDS ‐ 150,768 546 705 1,277 5,540 1109 ‐ 3,843

Gemidiriya Foundation

268,859 154,308 1,924 466 No

Borrowings 2,429

Not Allowed

4,133 1,358

SANASA Development

499,076 159,434 3,316 15,241 1,535 21,224 3,126 16,439 16,439

NDTF* N/A 242,578 798 N/A 1,988 3 1,308 7,782 ‐

Total 23,129,815 8,768,391 18,160 180,283 107,216 204,554 90,995 166,989 113,495


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Compared to State Banks, HNB is highly involved in microfinance activities and has offered significant amount of loans to the microfinance sector in all range of loan amounts. The absence of a cohesive regulatory and supervisory system for the microfinance sector has been one of the constraints to the growth of this sector. The Microfinance Act has been drafted to ensure the smooth functioning of this sector. The need for regulation is therefore, more pronounced when the industry is mature and significant in size, in order to ensure stability in the financial system.

BOX 3 PAWNING: A MICRO LOAN FOR POOR

Why is it important to Poor? A survey was carried out by the Department of Development Finance on lending of “Pawning” by the banking sector in 2011, considering that the 26 percent of total loan portfolio of banks are “Pawning”. It was observed that “Pawning” has become the most popular credit facility in terms of outreach to the poorer population in rural, urban and estate sector. These loan programmes are prepared with to meet the basic urgent needs and expectations of target customer group. Further, it was found that “Pawning” is more popular in rural areas, where as it is more common in urban areas. These facilities are different from the most bank lending and provide high volume of small loan advances within the short period of time. The facility is simple and easy to access. Pawning has increased substantially in the formal banking system since 1995* and within last five years the growth rate of pawning has risen at an average rate of 43 percent per annum. There was evidence that Sri Lankan community had informal sector at their community level that provide money on pawning gold or land for their urgent need of money. However, it is clear that now this has been replacing by the banking system and other formal financial institutions pawning by the formal banks from 2007 to 2011 shows in Table 10.

Table 10 Pawning Data from 2007 to 2011

Amount of Loans (Rs. Million) Name of the Bank

2007 2008 2009 2010 2011

Commercial Bank ‐ 12.80 539.60 3,757.60 23,928.40

DFCC Vardhana 27.00 206.80 339.50 962.80 4,361.00

Lankaputrra Dev. Bank ‐ ‐ ‐ ‐ 5208.70

HNB 16,780.00 21,130.00 21,920.00 27,970.00 35,720.00

Peoples Bank 76,143.60 96,313.50 125,120.30 189,797.20 291,325.70

Sampath Bank 11,962.00 16,444.00 24,817.00 43,306.00 64,009.00

RDB 46,729.50 53,883.00 58,234.10 66,189.20 75,917.70

BOC 24,670.00 37,783.90 55,278.00 93,796.20 188,481.10

NSB 10,758.30 14,607.10 24,572.00 36,217.00 57,822.60

Seylan Bank 1,577.00 4990.40 7219.00 17,601.00 30,623.20

Total 188,647.40 245,371.50 318,039.50 479,597.70 777,397.40

No. of loans provided 5,095,518 5,900,434 6,673,524 7,608,067 9,027,369

Interest rate 19‐24% 18‐24% 14‐23% 10‐14% 10‐14%

Average loan size (Rs.) 37,729.50 42,301.70 47,682.00 63,899.40 86,186.00

Growth rate ‐ 30% 30% 53% 60%

Source: All Banks The basic features of pawn business is the loan advances is adjusted to the World market price of gold. The interest rate for gold pawning is market oriented but it is slightly below or higher than the commercial lending rates but significantly below the informal money lenders. The interest rate has been decreased considerably within last five years because of competition among banks for this market and


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considers the disbursement of Rs. 777 billion in 2011 among the 9,027,369 clients for various purposes. It has increased by 300 percent from 2007 to 2011. The average loan size has been more than doubled within last five years from Rs. 37,729/‐ in 2007 to Rs. 86,186/‐ in 2011. However, informal financial sector still plays a dominant role in Sri Lanka. The considerable share of savings is held in the form of gold and jewellery. Still the illegal gold pawing and mortgage are considerably very high. Hence, the growth of this sector has made a significant impact to the economy of the country. * Reaching the Poor Clients of Sri Lanka ‐ People’s Bank Article, People’s Bank Pawning and Savings Center

In this endeavor, government has taken a decision to establish appropriate regulatory framework for the regulation and supervision of microfinance business. It also strengthens and develops the MFIs by enhancing their viability and accountability. Financing Facilities for Urban Informal Sector (Self Employment) The committee for the Cost of Living and Food Security reviews the fluctuation of prices of essential commodities and vegetables on regular basis, and takes remedial actions in order to protect the customers, farmers and traders. One of the solutions recommended by the Committee was to promote participation of informal sector such as the Federation of Self employers to distribute essential food items to tackle the additional over head cost adding by the formal sector. The Ministry of Finance and Planning has made arrangements through the state banks namely the Bank of Ceylon and People’s Bank to provide financial assistance at concessionary terms to lease small trucks (Dimo Batta/Lorry) and three wheelers in order for the self employers in urban townships to distribute essential food items at a low cost to the people. As a result, the middle and low income groups have opportunities to buy essential commodities relatively lower prices than the formal sector establishments. Table 11 shows the amount disbursed by the two state banks to lease small trucks and three wheelers.

Table 11

Amount disbursed by the Two State Banks to Lease Dimo Lorry/Threwheelers

Bank Interest Rate

No of Beneficiaries Amount Allocated

(Rs. Million)

People’s Bank

Malwatta Branch

Gampaha Branch 10%

50 (Demo Lorry) 60(Demo Lorry)

50.00 56.93

Bank of Ceylon Union Place

12% 10%

286 (Demo Lorry) 258 (Three wheel)

256.76 96.48

Source: People’s Bank & Bank of Ceylon ‐ Jan. 2012 Promotion of Microfinance Project (ProMis) The Implementation Agreement for the provision of grant of Euro 4 million was signed between the Governments of Sri Lanka and Germany on 26th March 2007 to implement the Promotion of Microfinance Project (ProMis). The project is being implemented in the districts of Ampara, Batticaloa, Jaffna, Mannar, Trincomalee, Vauniya, Badulla, Moneragala, Nuwara‐Eliya and Puttalam. The Phase I of this project was completed in 2009 and the Government of the Federal


20

Republic of Germany has agreed to provide Euro 3 million to implement the phase II for the period 2010 – 2012. The objective of this programme is to enhance and improve the services offered by the selected MFIs to the poorer section of society and micro and small enterprises in an appropriate manner. The project has three components:

1. Capacity development of microfinance institution 2. Development of microfinance service sector 3. Development of framework for microfinance policy and legislation

Main activities completed for the year 2011

Enabling Dialogues on social performance management in microfinance were conducted in Kandy and Hambanthota. This was coordinated by Lanka Microfinance Practitioners’ Association (LMFPA) with support from ProMiS

Conducted household cash management training and entrepreneurship development Training

Conducted Technical training on enterprise and livelihood Eg: food processing, carpentry dairy products

Conducted leadership & personality development training

Commenced Diploma in Microfinance for academic year 2011/12 for 45 participants. This program is jointly conducted by IBSL and Frankfurt School of Germany

Action has been taken to create microfinance resource pool in Jaffna

Signed the contract in May 2011 for the implementation of various capacity development programmes with LMFPA

Action has been taken to release the publication on Sri Lanka Microfinance Review – 2011

Held Steering Committee meeting for ProMiS in October 2011 and reviewed the progress of the project

Completed Impact Study for the Phase I

2.4 Other During 2011, the Department prepared 02 Cabinet Memoranda and Observations for 15 Cabinet Memoranda for the Hon. Minister of Finance and Planning. Further the Department has submitted comments for 10 Cabinet Memoranda for other Treasury departments. Most of the officers of the Department have served as members of the Boards (Treasury Representatives) of statutory bodies and as the members of the Cabinet appointed Technical Evaluation Committees and Procumbent Committees during the period concerned. Further, the Department arranged pre‐budget discussions with His Excellency the President and the famer organizations, chambers and traders and other relevant stakeholders to obtain diverse views and suggestions to prepare a more realistic and practical budget for 2012.


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3. Establishments and Administrations 3.1 Cadre Position

Position Approved Cadre

Existing Cadre

01 Director General 01 01

02 Additional Director General 01 00

03 Director 03 03

03 Deputy Director/Assistant Director 04 03

04 Deputy Director/Assistant Director ‐ Accountant

01 01

05 Planning Assistant 01 01

06 Research Assistant 02 01

07 Management Assistant 04 04

08 Driver 05 05

09 OES 04 04

Total 26 23


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3.2 Organization Chart

DD/AD DD/AD DD/AD

RA PA‐CIORA

Director ‐MF

Addl. Director General

Director General

MA ‐1 Dr ‐ 1 OES ‐1

DD/AD ‐ Accounts

Director ‐ DF & CMDirector ‐ SME

MA ‐1 Dr ‐ 1 OES ‐1

MA ‐1 Dr ‐ 1 OES ‐1

MA ‐1 Dr ‐ 1 OES ‐1

DD/AD

DD ‐ Deputy Director AD ‐ Assistant Director PA (CIO) ‐ Planning Assistant (Chief Innovative Officer) RA ‐ Research Assistant MA ‐ Management Assistant Dr ‐ Driver OES ‐ Office Employment Service

Sector SME ‐ Small and Medium Enterprise MF ‐ Microfinance DF & CM ‐ Development Finance & Capital Market


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3.3 Staff Information

Contact Details

Name Designation Telephone Fax Email

Mr. D.S. Jayaweera

Director General

2484542 2394908 [email protected] [email protected]

Ms. C.S. Perera Director 2484572 2484955 [email protected]

Ms. A.H.S. Fareeda

Director 2484595 2484955 [email protected]

Mrs. M.K.D.N. Madampe

Director 2484605 2484955 [email protected]

Mr. P.M.K. Hettiarachchi

Deputy Director

2484596 2484955 [email protected]

Mrs. W.L.M.A. Liyanage

Accountant 2484596 2484955 [email protected] [email protected]

Ms. R.A.D.R. Ranasinghe

Assistant Director


Ms. J.D. Kotinkaduwa

Assistant Director


Mr. H.P.S. Shantha Planning Assistant

2484884 2484955 [email protected]

Ms. A.M. Wickramasinghe

Research Assistant

2484884 2484955 [email protected] amanthi1974@ yahoo.com

Mrs. C. Assalarachchi

Management Assistant

2484855 2484955 ‐

Mrs. P.H.S. Samarawickrama


2484862 2484955 ‐

Mr. L. B. Bandula (Transferred on 08.08.2011)


2484862 2484955 ‐

Ms. E.W. Sheelawathi


2484862 2484955 ‐

Mrs. W. Fernando (Appointed on 05.09.2011)


2484862 2484955 ‐

Ms. J.M.I.A. Geeshani *

Data Entry Operator

2484884 2484955 ‐

Mr. I. Nandadasa (Retired on 20.08.2011)

OES ‐ ‐ ‐

Mr. P.A.A. Fernando

OES ‐ ‐ ‐

Mr. M. Sisira Kantha (Transferred on 22.08.2011)

OES ‐ ‐ ‐


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Contact Details Name Designation

Telephone Fax Email

Mrs. J.A.H.C.K. Jayasinghe

OES ‐ ‐ ‐

Mr. S. Arumugam (Appointed on 05.07.2011)

OES ‐ ‐ ‐

Mr. K.G.A. Kumarasiri (Transferred on 11.01.2011)

Driver ‐ ‐ ‐

Mr. P.D.D. Pushpa Kumara (Transferred on 02.02.2011)

Driver ‐ ‐ ‐

Mr. M.N.L. Premathilake

Driver ‐ ‐ ‐

Mr. K.R.P. Hemachandra

Driver ‐ ‐ ‐

Mr. D.A. Jayarathne (Appointed on 10.03.2011)

Driver ‐ ‐ ‐

Mr. R.A. Ananda Perera (Appointed on 16.05.2011 and Transferred on 17.12.2011)

Driver ‐ ‐ ‐

* Seconded from the Department of Census and Statistics


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3.4 Local Training Courses, Study Tours & Seminars

Name of the Officer Name of the Course Period of the Course

Name of the Institute

Ms. C.S. Perera Business English Language Training Programme

13.10.2011‐15.12.2011

British Council

Ms. A.H.S. Fareeda Director

Workshop on Risk in Financial Services

07.03.2011‐10.03.2011

Center for Banking Studies‐CBSL

Mrs. M.K.D.N. Madampe Director

Business English Language Training Programme

13.10.2011‐15.12.2011

British Council

Mrs. W.L.M.A. Liyanage Accountant


15.07.2011‐23.09.2011

British Council


13.10.2011‐15.12.2011

British Council Ms. R.A.D.R. Ranasinghe Assistant Director

Residential Training Programme on WTO & Trade Related Issues

09.04.2011‐10.04.2011

Dept. of National Planning & Tamasek Foundation Center

Ms. J.D. Kotinkaduwa Assistant Director


09.04.2011‐10.04.2011



09.04.2011‐10.04.2011


Mr. H.P.S. Shantha Planning Assistant


15.07.2011‐23.09.2011

British Council

Ms. A.M. Wickramasinghe Research Assistant


15.07.2011‐23.09.2011

British Council

Training Programme for Disciplinary Management In Government Institution

10.01.2011‐12.01.2011

Academy of financial Studies

Salary Conversations (Sinhala) 11.11.2011 (One day)

Public Service Training Institute

Mrs. P.H.S. Samarawickrama Management Assistant

Diploma in Communicational Skills in English

25.10.2011‐24.06.2012


Certificate Course in Basic English & Speech Training

26.05.2011‐26.09.2011

Sri Lanka Foundation Institute Mrs. C. Assalarachchi

Management Assistant Diploma in Communicational Skills in English

25.10.2011‐24.06.2012


Training Programme on Pension Scheme

24.03.2011 (One day)

Academy of financial Studies Ms. E.W. Sheelawathi

Management Assistant CIGAS Training Programme

26.09.2011‐01.10.2011


Ms. J.M.I.A. Geeshani Data Entry Operator

Diploma in Software Development

01.08.2011‐03.08.2012

NIBM

Certificate Course in Basic English & Speech Training

26.05.2011‐26.09.2011

Sri Lanka Foundation Institute

Mrs. J.A.H.C.K. Jayasinghe OES

Competency Development for Receptionists

31.10.2011 (One day)

National Institute of Labour Studies


26

3.5 Foreign Training Courses, Study Tours & Seminars

Name of the Officer Name of the Course Period of the Course

Name of the Country

Ms. C.S. Perera Director

Public Finance Programme 01.08.2011‐05.08.2011

Singapore

Ms. A.H.S. Fareeda Director

GTC. Financial & Technological Support For SME Promotion (A)

19.08.2011‐30.08.2011

Japan

Mrs. M.K.D.N. Madampe Director

Enabling Private Sector Growth

14.11.2011‐18.11.2011

Doha, Qatar

Mr. P.M.K. Hettiarachchi Assistant Director

Master Degree on Public Policy & Public Finance at the International University

03.08.2010‐03.09.2012

Japan

Ms. R.A.D.R. Ranasinghe Assistant Director

Course on Strategic Management

10.07.2011‐16.07.2011

Singapore

Ms. J.D. Kotinkaduwa Assistant Director

M.A. in Policy Economics 12.08.2011‐06.06.2012

USA


27

4. Financial Information

Item Estimated (Rs.) Actual Cost (Rs.)

Recurrent Expenditure 778,325,000 764,081,203

Personal Emoluments 9,374,300 9,044,946

Traveling Expenses 528,000 500,219

Supplies 1,322,700 1,297,131

Maintenance Expenditure 1,251,534 1,250,446

Services 1,609,466 1,261,222

Other Recurrent Expenditure 20,347 20,347

Development Subsidies (Interest Subsidies) 763,994,653 750,483,206

Economic Stimulus Package‐Transfers 224,000 223,685

Capital Expenditure 1,014,500,000 855,377,667

Rehabilitation and Improvement of Capital Assets 100,000 0

Acquisition of Capital Assets 124,320 52,080

Capacity Building 275,680 275,678

Promotion of Micro Finance Sector (ProMis‐GTZ) 2,478,809 2,478,809

Small and Medium Enterprise Regional Development Project (SMERDP)

1,521,191 1,014,475

SME Development Facility Project 1,010,000,000 851,556,625

Grand Total 1,792,825,000 1,619,458,870

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