CBSL awards micro-financing license to Berendina


Berendina Micro Investments Company (BMIC), the micro-finance arm of Berendina in Sri Lanka was recently granted a license to operate micro-financing by the Central Bank of Sri Lanka (CBSL), a first in the industry under the Micro-finance Act No 6 of 2016.

BMIC now will adhere to CBSL’s guidelines as a licensed micro-finance company. The license was not just a longstanding need for the organization but also for all micro-finance companies to ensure a healthy sector in the country.

With this recognition, there are many advantages for clients and Berendina. BMIC can now inculcate the habit of savings among its clientele by taking saving deposits as collateral against the loans. This in turn will help to reduce the cost of funds of the company and further contribute towards reducing loan interest rates. Providing the best interest rates to its clientele is one of the primary objectives of the company.

BMIC is owned by Berendina Development Services (BDS), a not-for-profit organization, which focuses on addressing challenges faced by poverty-stricken communities, and spends around Rs. 250 million yearly on the projects.

Berendina also has a third origination called Berendina Employment Centre (BEC) which provides scholarships for Advanced level students to increase their employability in the job market.

BMIC operates across 11 districts through 30 branches and 4,600 clusters that consist around 110,633 members. There are almost 100,000 active borrowers with the average loan size being Rs. 61,000. The loan portfolio balance outstanding is Rs. 2.92 billion. It also has the lowest interest rates among NGOs and private sector micro-finance institutions in Sri Lanka.

The company uses Progress Out of Poverty Index (PPI), an international accepted poverty measurement tool in measuring its clients’ poverty status. This enables to measure BMIC’s outreach to population living under different poverty lines and track their reach out of poverty when they progress from one loan cycle to the next.

BMIC takes every effort to support their clients reach out of poverty. Unlike many other institutions, BMIC provides enterprise development services such as relevant training, business counselling, marketing advisory and support in addition to many of its social services such as cash benefits during hospitalization and for funerals.

Going beyond micro-finance and enterprise services, BMIC during last year funded 1,157 Bright Student Scholarships (BSS) while its Sister organization, BEC provided 1,259 scholarships to the bright students in poor families who are not BMIC clients in the same villages.

BSS offers monthly cash allowance for a two or three year period for each student for their Advanced Level studies. The value of scholarships provided annually is over Rs. 32 million.

Berendina Employment Centre provides employment opportunities through career guidance, vocational and professional training, and are then linked to private sector companies for prospective employment. To ensure this, BEC spends an average LKR 80 million yearly.

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