Identifier
Created
Classification
Origin
06COLOMBO777
2006-05-15 05:48:00
UNCLASSIFIED
Embassy Colombo
Cable title:  

Sri Lankan Business Community's Post-Tsunami "Back

Tags:  ECON EFIN CE 
pdf how-to read a cable
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UNCLAS SECTION 01 OF 02 COLOMBO 000777 

SIPDIS

STATE FOR SA/INS; MCC FOR D.NASSIRY AND E.BURKE

USDOC FOR EROL YESIN

SIPDIS

E.O 12958: N/A
TAGS: ECON EFIN CE
SUBJECT: Sri Lankan Business Community's Post-Tsunami "Back
to Business" Program Helps Restart Commercial Activities


UNCLAS SECTION 01 OF 02 COLOMBO 000777

SIPDIS

STATE FOR SA/INS; MCC FOR D.NASSIRY AND E.BURKE

USDOC FOR EROL YESIN

SIPDIS

E.O 12958: N/A
TAGS: ECON EFIN CE
SUBJECT: Sri Lankan Business Community's Post-Tsunami "Back
to Business" Program Helps Restart Commercial Activities



1. Summary: The "Back to Business" project of the
Federation of Chambers of Commerce and Industry of Sri Lanka
(FCCISL) has helped restart a significant number of tsunami
affected businesses and livelihoods. "Back to Business" was
a comprehensive, private sector-led program. The Government
of Netherlands was the main sponsor of the program. A
number of other organizations including USAID are partnering
in FCCISL's efforts. End Summary.


2. The FCCISL's post-tsunami Back to Business Project,
which has so far assisted over 5,000 businesses/livelihoods,
has several components:

-- A grant assistance program: The program provides
commodities and equipment on a grant basis to restart
livelihoods and small enterprises. It also provides a
financial guarantee, by way of a deposit in a financial
institution, which could be used as collateral to obtain
loans. Total assistance under the two programs is limited
to Rs 20,000 (USD 200) for livelihoods, Rs 60,000 (USD 600)
for micro-enterprises and Rs 150,000 (USD 1500) for medium
sized enterprises. 4,130 businesses or livelihoods have
been assisted.

-- A loan facilitation program that helps affected
businesses obtain loans from existing programs implemented
by the Central Bank of Sri Lanka and operated through
commercial banks (these include the Central Bank-sponsored
"Susahana" program, which was an immediate post-tsunami
infusion of liquidity in the banking sector designed to spur
loans for affected small businesses). FCCISL has helped 952
small and micro enterprises obtain loans totaling over Rs
500 million (USD 5 million) from these schemes. (Note: In
total, Susahana has provided about 10,000 loans through
commercial banks disbursing Rs 3.3 billion (USD 330
million). The Central Bank has also facilitated two other
loan schemes with funds from the Government of Japan and the
UN. According to Mr. P. Karunaratne, Head of the Regional
Development Department of the Central Bank, all three loan
programs have now ended. A recent Euro 70 million (USD 56
million) loan from the European Union will assist the
tourism sector in 2006/7.

-- Business planning/management training, marketing
assistance and trauma counseling.

-- A special program to help women, by assisting their
livelihoods and female-owned enterprises.


3. The FCCISL, an umbrella organization comprising over 40
private sector chambers and commodity or trade organizations
spread throughout the country, has used its links with
chambers in the tsunami affected areas to implement the
project. It works with 10 district chambers in the affected
coastal areas of the southern, northern and eastern
provinces. The Netherlands Embassy in Colombo is the main
sponsor of the Back to Business project. Other co-sponsors
include USAID and the German Development Corporation.
USAID's livelihood restoration project, REVIVE, has funded
training programs and commodity grants under the Back to
Business project.


4. According Sam Stembo of the FCCISL, Back to Business
will continue through mid-2008 and aims to help a total of
10,000 businesses and livelihoods. FCCISL aims to target 35
percent of the assistance to women-led businesses. Many of
the other business assistance programs have now ended or are
now coming to an end. REVIVE, a USD 10.5 million USAID
project, will end in September 2006. It has assisted over
31,000 households disrupted by the tsunami. REVIVE
implements its activities through non-governmental
organizations, micro-finance institutions, and private
sector associations (including FCCISL). REVIVE provides
funds for commodity grants and training, microfinance
lending, and cash-for-work. Some of the grants will be
available for on-lending through four microfinance
institutions during the next three years.


5. According to Azmi Thassim, CEO of the Hambantota Chamber
of Commerce (in Sri Lanka's deep south),Back to Business
was developed in response to requests made by various

COLOMBO 00000777 002 OF 002


regional chambers. The small scale business operators
affected by the tsunami were not in a position to access
bank financing on their own or restart their businesses. It
is a practical program which helps through grants, bank
financing, training and marketing assistance. The program
has assisted small scale operators such as traders, small
industrialists (from lace makers to coir (coconut fiber used
in industrial applications) suppliers) and small eating
house and hotel operators. It has not assisted many
fishermen due to the plethora of other programs aimed at
assisting the fishing industry. According to Thassim, those
businesses that have participated in the program have by-and-
large had a successful reintegration into business life.
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