Sri Lanka’s Sarvodaya building supply chain for rural products | Sinhala News




ECONOMYNEXT – Sri Lanka’s Sarvodaya Development Finance, which is linked to a network of 5,400 development societies in areas says a digitally supported supply chain is on the cards to take products to cities and the world.


“Looking at the future and current situation, even in Sri Lanka there are certain websites and business portals that do over 10,000 transactions per day,” Channa de Silva, Chairman, Sarvodaya Development Bank said.


“There are other countries similar to Sri Lanka that sometimes do far more than that.”


De Silva says a Sri Lankan story is vital and given that Sarvodaya covers some 1000 deeply rooted villages that it creates a business platform in which the villages can endorse their products.


Riding on the Sarvodaya brand name build up over time is expected to help rural producers.


“We create a business portal where the village societies endorse the products generated are authentic and is made in the village,” De Silva said.


“This gives a stamp of authenticity and originality by the society.”


A physical supply chain is needed to take the products to cities and perhaps to the world.


“Then you use the village transportation system to bring the products from the village to probably a Sarvodaya district centre and from the centre, we will also arrange transport to bring it to the main area the product has to go from there the products can also take the international route.


“So this entire chain is very logical to make and we believe we have the infrastructure to quickly bring the village products to the main markets in the country first and then to the international markets. When you see the making of the marketplace where the society is involved, village entrepreneurs are involved and village transportation is involved that entire link gets created, that is the next step we envisage to be involved.”


Sarvodaya is built on a set of values incorporating environmental concerns, ethnic harmony, spiritual development its President Vinya Ariyaratne says. There are 5,400 such societies around the including the North and the East.



“That is a good base for us to build on for the future not just in economic recovery in the time of covid but also to look at new opportunities for economic development, there maybe products and services these villages can offer in the post-covid era because you will need different types of products and services compared to what we had in the past,” Ariyaratne explained.


“So, this gives us an opportunity to also look at the creativity and the innovativeness particularly the youth and women.”


In the Covid era there is a need for entrepreneurs in the village and to create new opportunities.


“I think the future is really based on these community organizations we can create more opportunities especially because there are many young people who would have lost their jobs and are returning back to villages,” Ariyaratne added.


“Migrant returnees mainly women who have lost their jobs are returning to the villages. So we create new opportunities and try out new ways of doing things for these villages through these village community base.”


Sarvodaya Development Finance is raising 1000 million rupees through an initial public offer which is to open on November 23.


The IPO is expected to strengthen the capacity of the firm to raise funds and expand lending.


“There are two objectives,” CEO Nilantha Jayanetti said “one is to comply with the central bank regulations because all these finance companies should be listed and the other objective is to raise the much-needed capital because of our future growth plan


One is when we list, we become more visible and anybody can have access to our numbers but more importantly, we are looking at attracting low-cost funds to the organization in order to accommodate the ever increasing demand of these financials.”


The over 9-billion-rupee total asset worth company was originally started to create a rural-area centric business to keep the savings of rural depositors in the same area and to serve needy entrepreneurs.


As of now, 52 percent of the SDF is owned by Sarvodaya Economic Enterprises Development Services (SEEDS) Limited, 22 percent by Sarvodaya related entities, and 13 percent each by Japanese Gentosha

Total Asset Consulting Inc. and other existing shareholders.


The SDF has 30 branches and 21 service centers island wide and its profit after tax in the past four years (2018/2021) has shown a growth of 23.4 percent calculated on a three-year compounded annual growth rate (CGAR).


The profit after tax in the last financial year ended on March 31 rose 80.3 percent year-on-year to 183.4 million rupees, the company data showed.


The total asset and equity also have expanded at 12.4 percent and 24.5 percent compiled on the same three-year compound annual growth rate.


The loan growth, which was at 2.76 billion in 2016 had almost tripled in the last financial year ended in March 31, 2021 to 7.9 billion rupees.


It also had a total deposit of 4.55 billion rupees from customers by the end of 2018/19 financial year. (Colombo/Nov17/2021)


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