Rural economy proved to be a marathon vs urban economy's sprint, during lockdown: LOLC CEO


by Sanath Nanayakkare

Sri Lanka's economic distribution and population distribution became crystal clear as never before during the COVID-19 lockdown, emphasizing on an accelerated need to transform our rural economy going forward, Conrad Dias, Director/ CEO LOLC Finance PLC said on Wednesday.

"The newly emerged situation during the pandemic illustrated the importance of uninterrupted rural economy though it might not have delivered the same level of economic activity coming from urban businesses which had come to a halt," he said.

He made these comments while speaking at a webinar organized by the DBA – University of Kelaniya on Transforming Banking and Finance in post-Covid-19 business environment.

"Our economic distribution and population distribution was quite clear in this scenario. In my view, the economic activity in rural areas presented a real test of our overall economy where 80% of our population live, vis-a.vis where a lot of our economic activity revolves round urban businesses. When urban economic activity was still on lockdown, our rural economy was relatively active. Rural population's contribution to the economy maybe small but it showed that rural population can drive the economy in their own unique way and our economy depended on the economic activities of the rural population during the time," he said.

Further speaking Conrad said,"The government has stopped or curtailed some imports on a short-term basis, and it's also an indication of the need to have the rural economy run like the clappers. Not only in Sri Lanka, the economy in many asset-rich countries in the developed world such as Australia and New Zealand are also driven by their rural economy to a great extent. So, this is a renewed opportunity for us to transform our rural economy and certainly the banking and finance sector will need to play a major role in that transformation. Getting our rural economic players to utilize our digital technology platforms on a much wider scale than now would be vital in that transformation. Of course, we saw an encouraging spike in their use of digital platforms during the pandemic, but it hasn't still reached the tipping point where no-one avoids it any longer. The biggest challenge we have is educating and enabling them to embrace digital platforms and mobile banking to power the rural economy going forward. We have already done a lot of work to enable them in a digital economic perspective, but there's a lot more to be done to make it more inclusive and successful".

"At this point in time, businesses are at a stage of survival and adoption – and the next phase would be how businesses can collaborate to achieve these common objectives after we have passed the survival stage." he said.

"LOLC is definitely part of helping the Central Bank in executing its COVID-19 relief package designed to help individuals and businesses affected by the pandemic," he noted.

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