Samadanie Kiriwandeniya is the Chairperson of the SANASA Development Bank and has extensive experience working with microfinance, cooperative banking, social movements, and the development sector. In this interview with Women Talk, Samadanie talks about her lifelong involvement with the SANASA social movement, the significance of paralleling community empowerment with microfinance initiatives, microfinance within a gender space, and the increasing need of recognising the potential of SME development in Sri Lanka.
Before my father decided to start SANASA, he was involved with Sarvodaya and the National Heritage Movement. I come from a family of five girls. My elder sister, myself, and the children of Dr A T Ariyaratne, founder of Sarvodaya, went to different villages, witnessing the unfolding of both the Sarvodaya movement and the National Heritage Movement. We went from village to village, witnessing the rebuilding of village tanks, the ideology of the grama raajya, and getting the temples and people mobilized together to get a social process developed. That was my childhood. We were in one village or another village, in some part of the country, travelling with my father. I was very much witnessing a social mobilization process.
When my father founded SANASA, I was a little old enough to understand the discussions. I heard the problems of rural people, saw different kinds of community groups, saw how my father embraced those people, how a community can be mobilized, how to listen to a community, and what kinds of issues are related with water, poverty, children, health, and education.
It is a very different set up when you look at 1970s and 1980s rural Sri Lanka and current rural Sri Lanka. There was no communication. People were very isolated. You could see a lot of naked children running around and there were many illiterate mothers who did not speak up, even when you talked to them. It was a very laid back community.
I was able to see the growth of a movement that had a sheer vision, a commitment to that vision, and the mobilization of a community along that vision. To see the strength of the community is a positive thing that helped me later on to take up any challenge. As long as people are involved and as long as you can actually have a proper engagement with the people, I was able to develop this conviction that you can get anything done. That is the learning that I had.
It was a very wholesome kind of a childhood that I had, growing up with my father. He spent his entire lifetime with the same conviction that if you empower rural people, if you empower a mass-scale community, and with a national thinking, you cannot break a country. Seeing that kind of commitment also groomed me. Although he did not purposely identify me as a person to take this up or trained me, I was able to witness the social process and grew up with it.
How did you first get involve with SANASA in a professional capacity?
My first involvement with SANASA in a professional capacity was as a translator to those who came to study SANASA from other countries for their PhDs or Master’s. I got a small fee also! This was after my Advanced Levels. Before that, I was involved in a voluntary capacity. None of the girls in my family wanted to be professionally involved with SANASA. My sisters studied in the science and math streams. I also studied mathematics but I always liked to be involved in the development process. However, I chose a different NGO instead of coming to work with my father.
After my second child was born, I decided not to do fulltime work, until my two girls were at least 10-12 years old. But before [the 2004 boxing day] tsunami, there was a vacancy that came up in the SANASA campus, which was a newly incorporated training institute. They wanted somebody to coordinate the training and program side of the campus.
While studying at the University of Saskatchewan, in Canada, I was voluntarily involved with some of the Canadian cooperative capacity building projects that they were doing. I had some strength that I could bring to SANASA. When this opening came up, although I was not planning to do a fulltime job, it was too tempting because the education institute is the only place in SANASA where I wanted to be. Not in the bank. Not in any enterprises. I wanted to be in the place where planning, strategizing, and human resource development happens. That is where I thought I had the skill to add value.
How did you then go on to play a role with SANASA’s national tsunami response program?
After the tsunami, there was too much to be done and a lot of programming needed to happen that involved negotiations with international funders who were interested in implementing programs with SANASA. There was a need to have a person who understood SANASA’s long term vision as well as the funders’ interests to strategise projects; so as to not hamper the long-term process but also capitalize on the momentum. In order to do that we had to work with international volunteers, SANSA national level apex CEOs, and board level people, in strategizing and developing the projects.
I thought I had that skill. I think my father thought so, too. He asked me to steer the national tsunami response of SANASA, which included about 23 funding organisations and a large number of short term relief projects as well as long term transformation projects.
I only came to the SANASA Development Bank for a short term. But once the projects got developed, the bank’s GM thought that in order to implement some of these projects the corporate management has to have the strengths to understand these projects. He said I should join the management because I could not make certain decisions [about the projects] without being part of the core management. That is how I entered the management of SANASA.
I handled international relations. This was very different from international relations that any other bank does. In most of the other banks, international relations mean trade and businesses. Here, international relations meant running an NGO within a bank. Until some of the projects were finalized and getting streamlined, I was handling that. I then went on to head the marketing department.
How did you take over your current role as Chairperson of the SANASA Development Bank (SDB)?
When my father retired, there was not enough time for the SANASA movement to prepare for a successor because we were about to list as the bank. A lot of efforts and loyalties had been developed with my father when we established the SANASA Development Bank. People were worried when he retired that, if all these networks collapse, the bank may lose its identity in the market, just when we were about to list. Even from the management level, especially the then General Manager and some key board members, representing the cooperative sector, wanted me to take up [the position of Chairperson].
At that time, I hesitated. But then I knew that my father was retiring. I was asked to be more involved to know what is going on and how to become a board member of the bank. So, I had to step down from my permanent job at SDB and contest [for the position]. I think the people really elected a Kiriwandeniya, not really me. That is how I ended up coming to the board. It was really not a conscious planned decision but I had to take that decision due to the circumstances.
SDB is the only microfinance cooperative network in Sri Lanka, which covers all provinces with over 8,000 primary societies. There are close to one million members, affiliated with the bank. How has microfinance been successfully implemented through the bank and the social movement?
Microfinance is a financial tool. There are organisations that does only microfinance. There are also cooperative organisations that do microfinance because people who do not have the absorbing capacity to get bigger volumes of funds are in need of small volumes of funding. That does not mean that those people will never have absorbing capacity.
In cooperative finance, different types of people pool their funds in order to have their financial needs sorted. If they need bigger volumes of finance later on, they should not be restricted by the identity of their organisation as a microfinance organisation.
SANASA was identified as one of the best microfinance organisations but the brand SANASA was created for a different social transformation process, which was to eliminate poverty in our communities. It was about getting the community to empower themselves rather than depending on charity foundations or governments. This meant mobilizing and empowering a community based on their skills and capacities, not focusing on their lack of capacities and lack of skills. It is about mobilizing with a self-reliance. That is the fundamental difference between how we engage with the community and how probably a purely microfinance deliverer engages with the community.
When the SANASA brand was introduced and the re-engineering of the thrift and credit cooperative happened, thrift came to the beginning. This means that it is not only credit cooperative, it is thrift and credit cooperative; not only thrift societies but credit also involves. You mobilize your funds in order to get your funding needs sorted. You basically create a bank but starting with not outside funds but with your own funds. If you do not have money, you get together and work together to produce something which you can sell and then get your money.
That takes a long period of engaging with the community, belief in that community, and preparedness to work with that community on long term basis, which involves commitments, strategizing together, ability to listen, and ability to empower the community. And then the preparedness to leave that community when they are ready and let them take over the development process.
What is lacking now is that you are looking at a community and see only a one-time opportunity in that community and treat microfinance as a one-time transaction. When you are not prepared to stay with that community until the community is ready to absorb that money you are not responsible for that community to begin with. The community will also not have the capacity to analyze, not having enough literacy to understand the pros and cons. You will end up having what we see now in the Northern Province – over indebtedness and not having anybody to help the community to sort these issues that were created by wrong financing.
Because we continue to experience natural disasters in Sri Lanka, for instance with the recent floods, if you could take us back to the time of the tsunami and how, in particular, microfinance assisted affected communities?
When the tsunami happened, while a lot of welfare initiatives took place, to streamline the recovery the Central Bank was very prudent to introduce a specific loan product, which was a six percent interest rate microfinance. So, anywhere you intervene there is that start up product. The package that came was a generic kind of package that centred on livelihood development and microfinance because people had lost their livelihoods, income-earners were gone, the shops were gone, and the income source was gone. It was starting from scratch for most of these people.
There was also a large number of women whose husbands were lost, such as those who were fishermen. These women had to go behind government officers and recovering documents while getting the house going. Some small businesses needed to be started as quickly as possible. Microfinance in that sense helped. One to get a family going until you get a proper income developed and also to get a small business started. In that sense, in order to recover quickly, microfinance did a good job.
But the issue of that big inflow of funds was that we all ended up treating community development in a very microscopic way. We could not see beyond micro when we were talking about rural enterprises. If there was a proper value chain type of a thing developed, we should have put that money into the assembly development and not into micro. But people who supported the tsunami recovery process was also small NGOs and CBOs. They only knew how to deal with micro level customers. They did not know how to deal with business customers. Banks were not taking the lead in this. They were also happy just delivering tsunami microfinance and they were making good money out of the funding. They were also opening up to think that you can get low income funding into microfinance volumes.
Everybody was copying each other, trying to do micro level, which ended up being almost like last decade’s story of rural enterprise development in Sri Lanka. Now, we cannot come out of it because we only know how to do enterprise development with microfinance. That is where we got stagnated. That is a challenge because, even now, although people are talking about SME development, there is a clear difference between micro enterprise development and SME development.
The customer is different and the challenges are different. It is more market driven. You need to know what you are talking about when you are talking about capacity building. You need to know the market information and you need to have proper technology support. It is a more tedious thing. Therefore, even the SME development officers, even public allocated SME development officers, seem to have the same microfinance type of approach when you are talking about SME.
I think now the country is ready to move beyond microfinance but we are still talking about microfinance, and talking about business that can be made in microfinance. I think we have run the microfinance circle in the country and I think it is high time that we focus on SME. But other than the rhetoric, I do not think we have the eco system developed in order to support SME in the way that we developed microfinance.
To use your own words about microfinance and development: “just because internationally a discourse dies, a model does not die” and that we need to examine why we use microfinance rather than how. In the current postwar and transitional justice phase in Sri Lanka, how can we position microfinance and SME within a development context?
I think the biggest issue in Sri Lanka, in my opinion, is that the discourse has happened in silos. Integration, co-existence, and discussion happens without the economic people in the room. Recently, at a major financial discussion where everybody was talking about how the country’s financial position will be like and how the banking industry will be like, I did not hear anything about people and the environment. We are all talking about how to fix ratios and how to fix numbers. Of course, it makes sense for financiers but I don’t know whether they can actually talk with real people, engage with real people, and explain what this means when it comes to strategizing their businesses and when it comes to thinking about which businesses they should engage.
Bankers have their own discussion. Chambers have their own discussion. Funders have their own discussion. So, we are having silo discussions. Therefore, we cannot understand where the country is heading. That is one issue.
I think microfinance still has a role but that role should be a very quick role to get a group to enter into a market. That is not where the business should be focused on. Business should be focused more on how to stabilize the group who have just entered the market. The SME discussion currently happens with the people who have already come a certain journey in their business path because those are the people who come to banks. We should be engaging with people whose loans get rejected from the banks, which is the larger number of people, which is about 40-50 percent of the SMEs.
I have engaged with some of these SME people in different forums. In most of these places, they are very negative about the banks. They say that no bank really understands their risks or actually supports them. It is not the banks that support them. It should be the banks that support them. Banks should be moving with SMEs rather than being risk averse and putting the SMEs somewhere until the SMEs somehow find their own way and clean their books and records, get all the documents ready, and then come to the banks so that the bank does not have any hard work to do. I think that is where we should be focusing.
More policymakers and more service suppliers should go to the customer rather than waiting for the customer to come. Now with the IT industry entering into some of these markets I think there will be more positives. The danger is that IT and mobiles will tap people individually, letting the human away and getting more services on online platforms.
I think still there is a role the bankers can play. If the bankers do not play that role, most of the banks will be redundant in few years to come and most of the customers will be so vulnerable in the global market because they will not have any gatekeepers or any support people.
How can microfinance be contextualized within a gender space in Sri Lanka – how has it been particularly effective in terms of empowering women?
In order to develop a savings base, microfinance was very helpful for women who do not have big money to bring to a bank. Microfinance provided an option for women to develop their own risk management. It also helped them to have quick access to immediate domestic or personal needs, like pawning products or instant loan arrangements. They did not have to go to a person who will manipulate their vulnerabilities but they had their institution to which they can go and get their money. So, in that sense it empowers individual women. Also, most of the traditional microfinance organisations have either group based systems or community based systems where you develop social links. Other than that financial link, you have a network. That means you are not isolated anymore, as a person.
Initially, when SANASA started we met women who were not very social beings. They were mostly in the background. But through various initiatives, such as SANASA society meetings, they were given a chance to come to a society, ask questions, sing a song, make a speech, and develop their personalities. Also those forums provided them with opportunities to learn about many things that are related to them, such as health and education of their children.
But just doing small micro enterprises that are not linked with the proper value chain will keep people in a euphoria kind of a thinking. You eventually will develop your business and then become a little bigger. But if the microfinance organisations do not have a similar credit portfolio to support that kind of a journey and if women are not properly linked with other people in the market, it will just keep them in the periphery forever. The successes that I have seen in SANASA is that when women are supported on sustainable basis, providing credit with non-financial services and helping them to develop a path.
In SANASA, we have the Uththamavi total package. We now also have a women’s organisation in SANASA. There we started with capacity building in the micro manner, helping women save and start small businesses. Now we have linked them up with some of the market players. Some of the forward sale contracts have been created. Some supports that are not directly linked with finance are also provided, such as how to balance their time and children. You can actually see the women walking along a journey. But there are still major gaps, which needs to be filled.
What are the challenges of maintaining the cost structure of a bank that has a focus on micro credit and in working with rural communities, which is quite different in both vision and action from a commercial and corporate banking model?
We have the lowest branch operational cost when you compare with the banking industry. I think the biggest strength in SANASA is that, when it comes to microfinance specifically, in most of the delivery places we have about 56,000 volunteers. Every single society has seven committee members who are working purely on volunteer basis to promote the brand; to take the credit to the people, to educate people, to provide non financial services, to do financial literacy training – all these things are done by volunteers. So, that is a very big strength.
We also have the SANASA network, which employs about 10,000 people who are also working with the bank but the bank is not paying them. So, it is that network that continuously mobilize and nurture the cooperative movement, which is our clientele. In addition to that the SANASA brand has very good PR. A lot of people are willing to come and help SANASA without getting paid. There is quite a bit of public networking that we have.
But no organisation can develop this overtime. It is the brand loyalty and the consistent brand value creation that we do. If there is a discrepancy between what we say that we are going to deliver and what we actually deliver, we cannot last this long. It is the real commitment that we have to develop the community, in addition to the SANASA network, which no other microfinance organisation has. In that sense, we are very privileged and fortunate to do this.
What are some of the international relations and platforms that SDB has been involved with in strengthening its operations?
The Canadian government and the cooperative movement, Australian development organisations, Rabobank and Dutch development organisations, and GIZ of Germany are some of the critical partners of SANASA. They have supported SANASA in the development journey; in terms of not directly supporting and providing seed capital to SANASA but helping to do non-financial services and capacity building in order to have this sustainable model.
We have benefited with the learning from organisations like Rabobank, which is very similar to our model but now is one of the best commercially operated cooperative banks. So, they share knowledge with us, bring expertise to us, and sometimes the funding in order for us to develop our staff and customer capabilities, strengthening the cooperative movement.
Platform wise, we were in the International Cooperative Banking Forum. The previous chairman was in the executive committee. We have partnered with the Italian cooperative organisation ETIMOS, the World Council of Credit Unions, Asian Council of Credit Union, DID a Canadian-French Cooperative organisation that has a similar international thrift and credit cooperative to SANASA. Through these networks, we learn about how cooperative banking models survive in the global market in different regulatory setups.
SANASA is quite well known in the international platform. Now we have international shareholders like FMO, SBI-India, IFC. There are all kinds of international relationships. The vision of the bank is that we want to be the apex bank of the cooperative sector but with a global focus. We always need to move with what is happening in the global front. In order for us to do that we need to be in some of these places.
You are a graduate of the University of Peradeniya and you have a Master’s in Sociology from the University of Saskatchewan, Canada. What role did your higher education play in your work with the social movement as well as your current role as Chairperson of SDB?
I did my Master’s in Saskatchewan, which is located in a province where the Canadian cooperative sector is very strong. I was able to actually see how very successful cooperative systems operate. The University had an institute called the Centre for the Study of Cooperatives where I worked as a student intern. I was exposed to research that was done in the Canadian cooperative sector and what the challenges are in the global cooperative sector in terms of success and business models.
The topic that I did for my research was about the female leadership in credit cooperatives. I was looking at the credit cooperatives that are generally financial organisations, capitalizing on voluntary times, and in that kind of setups that prioritize fulltime commitments from people and financial mandates what are the challenges for female leadership and the challenges for emancipatory agendas for women. I did the research on SANASA. With that learning we were able to link it to establish the women’s organisation in SANASA because I was able to actually understand why a critical female focus does not come out [in these setups]. I was able to study SANASA objectively and bring that learning back to SANASA, which helped develop the SANASA women’s wing into the Uththamavi Company.
Could you elaborate on the idea behind the Uththamavi Company and how it particularly benefits women?
Out of one million members, 51 percent of SANASA’s membership are women. We need to have a more focused approach for women. The key idea [of the company] is to look at some of the thematic things that are very critical for women in the years to come and encourage SANASA service providers to develop products and services to support these things.
For instance, the ageing issue in the country. Ageing will be an issue for women, specifically because some women do not have regular income. Therefore, they are not going to have regular pensions. In the case of the death of their husbands, they will have no money to pay for their medicine and healthcare, no one will be around them because everything will be technology based and children have migrated overseas. Most of the women in Sri Lanka are also working in the Middle East [as migrant workers] or in the garment factories and when they retire they do not have those social connections and they are going to be isolated.
We have to prepare these women now when they are earning money. Most insurance agents also approach men. Most of the women do not even have life insurance. Unless they prepare for their retirement, nobody is getting ready for their retirement. We need to encourage women who are now in the productive age to start planning for their retirement. Although these are not financial issues, these are going to kill the finances that they have. And these will create longer term financial and non-financial issues to the country.
Any future projects to look out for?
For the last forty years we were engaged with microfinance. We are professional in microfinance. But I think as an entire movement, across the movement and across the apex of SANASA, we need to get more engaged with the market. In the next five to ten years, in whatever capacity that we can, the bank and I personally, will be involved in helping SANASA to have a better comprehensive service package for the SME sector.
Date of Interview: 7 December 2017
Interviewer and photo: Shashini Ruwanthi Gamage