Credit Fund in Operation

The Janasaviya Trust Fund(JTF)in Sri Lanka works to alleviate poverty in a variety of ways which includes the granting of credit to the poor.

The savings and credit scheme of the JTF is carried out by the JTF Credit Fund.The Credit Fund works as an apex organisation which operates its credit scheme by providing funds to Partner Organisations(POs)which in turn give out credit to the poor and becomes involved in the actual running of the savings and credit programme.

The Credit Fund is operated by grouping the beneficiary community. Trained change agents from local communities work with the target groups and facilitate discussion to raise awareness of the proposed credit and saving scheme.

Upon accepting the scheme, the entire target group forms themselves into small groups of 5 to 7 members. The members select each other but members within one group must not be related to eachother or from the smae household. Also the members must live close to each other in order to facilitate meetings and have regular contact. The members learn about each others financial and economic activities. Each member of the group has the opportunity of considering applications made by people wishing to gain membership and each has the right to reject any person who is considered unsuitable.

The group structure of the Credit Fund is in 3 levels. The core groups, the management committees and the executive commettee.The core group is the basic unit of the structure and is the village level group handling the savings processing loan applications, collecting repayments and monitoring loan projects.

The Executive Committee at the second level is responsible for developing guidelines for loans and savings, managing the Group Contingency Fund and of providing support services such as technical knowhow anbd marketing services.

At the highest level is the Executive Committee which liases with the Partner Organisation and resolves any issues affecting the members of the core groups.

The disbursing of loans is done to individuals but the loan is considered one unit of the group loan. The group is therefore liable as a whole for the repayment of the loan. This makes individual members feel responsible towards each others’ loans as the failure of one member to repay jeopardises the entire group’s access to future credit.

The savings aspect is also sustained by the group in that members encourage each other to save and pooling of savings can be done through scheme such as the Group Contingency Fund.