HOME
Sri Lanka Jaffna peninsular revival driven by road link

At a remote fishing village in Sri Lanka’s northern Jaffna peninsular a fisherman tells a group of officials from a state-run commercial bank and the country’s central bank the difficulties faced in a getting loan.

"We would like to thank the bank for introducing a new loan scheme, but the requirement for two government officials to counter-sign it had made it inaccessible to most of us," the middle-aged fisherman says.

"We cannot find that many government officials here to countersign the loans."

Central Bank governor Nivard Cabraal proposes that three members of the community counter-sign the loan from state-run People’s Bank.

"You have to tell us your problems," he tells the members of the St. Anthony’s Fisheries Co-operative Society in Gurunagar, Jaffna at a meeting presided over by the parish priest Milfer Vaz.

"Otherwise we cannot solve them. You also have a very strong record of paying back loans."

S Sunthereswaran, who manages the branch of private listed Hatton National Bank in Jaffna’s Chunnakham area, says the repayment ratio is 95 percent.

With fishing restrictions being gradually relaxed after the end of a three-decade long civil war, fishermen in Sri Lanka’s north are gradually getting back to the sea. They need credit to buy boats, engines and nets.

Credit Revival

Sri Lanka’s Central Bank is pushing a credit scheme dubbed ‘northern revival’ or Vadakkin Wasantham, to give three billion rupees to small businesses in the north.

The area has been wracked by a civil-war for three decades during a separatist struggle waged by the Tamil Tigers, and was cut off from the rest of the country for most of that time.

But now the area about 400 miles from Sri Lanka’s capital Colombo is experiencing an economic revival. In Jaffna city billboards are advertising anything from mobile phone services to cosmetics.

But occasional roofless shells of buildings and vacant overgrown plots where houses once stood, bear testimony to fighting in days gone by.

"The government has given a strong commitment to develop this area," Cabraal tells a crowd at the opening of the first Jaffna branch of NDB Bank, a listed company in Colombo’s tock exchange.

"We have a lot of catching up to do."

Adjoining the new bank is an agency for motor cycles and three wheeler taxis.

Since setting up the shop in early September, says its manager C J Paul, 120 motorycles and 15 three wheelers have been sold.

In Achchuveli, a lush agricultural area irrigated by pumped ground water, state-run Bank of Ceylon is handing over 50 cows brought from the South of the island to dairy farmers who got a loan of 50,000 rupees each, along with boats and half a dozen farm tractors.

The chairman of Bank of Ceylon, Gamini Wickremesinghe says its branches in the Jaffna peninsular have given 2.5 billion rupees in new credit in the past nine months, including micro loans, and 800 credits from the ‘Northern Re-awakening’ scheme.

New loans demand in Jaffna comes at a time credit growth in the rest of the country is negative. The Bank of Ceylon says it has boosted its network in the peninsular to 24 from the earlier 18 with the end of the fighting.

The Central Bank has approved a series of branches of various commercial banks to open in the area since the end of the war.

Road Driven

The demand for credit comes after a highway that links Jaffna to the rest of the country was opened several weeks after the end of the war, and traffic was firsts allowed under tight controls.

At first about 40 to 60 trucks were allowed to trickle along the highway, under tight controls, bringing consumer goods, hardware and other cargo, and taking away the produce of Jaffna’s farmers and fishermen.

At the height of a ceasefire before fighting resumed in 2006, the highway carried several hundred trucks a day.

The prices of goods coming from the South have fallen slightly, say residents. In December the entire road was thrown open.

But fish and vegetables grown in the peninsular, which are now transported to the South of the island, fetch high prices, giving extra income for farmers and fishermen.

Higher incomes and demand for the area’s produce are driving the demand for bank credit.

Under the ‘Northern R-awakening’ scheme credit of up to 200,000 rupees is given. But banks are lending higher amounts from other funds.

Julian Sahayarajah became the first customer to get a 600,000 rupee loan to buy a 28 foot boat, from the newly opened NDB Bank in Jaffna this week.

"The price of prawns has gone up to about 400 rupees from 200 rupees before the road was opened," he says.

"Crabs, which were selling for 140 rupees a kilo, are now selling for about 250 rupees wholesale."

S. Sathaseelan, a vegetable farmer in Achchuveli says a small onion which is popular around the country which fetched 20 to 30 rupees a kilogram before the war now has a farmgate price of around 50 rupees a kilo.

At a gathering in the Jaffna library, which was burnt down in the early 1980s and became a symbol of the grievances of ethnic Tamils, and was re-built in 2003 by the government, city businessmen and academics tell the visiting Central Bank chief their problems.

Some fishing restrictions are still there, and they would like them also relaxed.

There are worries about Indian trawlers poaching in Jaffna waters with the region’s own fishermen not having the wherewithal to buy larger multi-day boats that can stay in the sea longer and land a bigger catch.

"The A-9 is open. But it is closed also," says P Balasunderam-pillair, a former vice chancellor of the Jaffna university.

"In terms of the economy, communications and transport is vital. But we still have to travel in convoys. If the registered driver of a cooler (freezer truck) is not available, the truck has to stay."

One Jaffna resident says they want credit not just for agriculture and fisheries, but also for computer training schools and information technology labs, so that their children can work in business process outsourcing firms in a knowledge economy.

- (LBO)

Google
www island.lk


Copyright©Upali Newspapers Limited.


Hosted by

 

Upali Newspapers Limited, 223, Bloemendhal Road, Colombo 13, Sri Lanka, Tel +940112497500