BERENDINA STICHTING CHAIRMAN’S STATEMENT

It gives me pleasure to inform the reader about the results realized in 2010 by management and staff of our foundation in Sri Lanka.

Our mission is to not only achieve Millennium Goals such as eradication of poverty and improving health conditions, but also promote economic opportunities for the beneficiaries of our program. These programs are being managed by the Berendina Development Services (Guarantee) Ltd. (BDS) and the Berendina Micro-Finance Institute (Guarantee) Ltd. (BMI).

The Head Office in Nawala/Colombo and the field staff (totalling 170 persons in 27 branch-offices) are highly commended for having realized, and sometimes surpassed, almost all the objectives set for 2010. Increasingly, fruitful cooperation with i.a. district and divisional secretariats is contributing to a successful implementation of our projects.

Very unfortunately, several programs were badly affected by unprecedented and continuous heavy rainfall in December, and January of this year.

Under BDS livelihood development activities  are being implemented for the benefit of economically active poor families (EAP) and economically inactive poor families (EIP) : improvement of health status of elders, financial assistance for bright students, livelihood assistance (monthly allowance, construction or repairing of houses, provision of toilets, grants to start, expand or diversify income generating activities (e.g. tea cultivation, goat or poultry keeping), community projects (road and bridge construction, renovation of drinking water systems) are now being implemented in approx. 200 GN divisions and 30 estates in the Yatiyantota, Ambagamuwa, Bulathkohupitiya, Trincomalee, Thirappane and - since 2010 - Mihinthale Divisions. Interestingly, farmers in Thirappane are provided with elephant crackers and jute plants for a natural fence, to protect their cultivation

BDS/BMI is presently the largest NGO working in the plantation sector. In 2010 our Plantation Program expanded its operations to over 30 estates. It consists of the following interventions : improvement of the health status of malnourished children (dry food rations for malnourished children, training of their mothers, home gardening for these families), provision of safe drinking water – in partnership with the Palm Foundation, medical facilities (medical clinics, medical visits to bedridden patients, cataract operations, elders programs (e.g. livelihood development activities, sport meets, exposure visits), and community projects.
It should be noted that over the past years estate managers are showing a growing awareness about the need to support the poor living on their estates. Their contribution to the implementation of our projects is very welcome.
Approximately 42,500 families are benefiting from the various programs under BDS.

In 2010 the Employment Resources Centers (ERC) program - started in 2004 - showed good results. Three new branch-offices were added to the ERC-network, that now consists of 10 branches. In 2010 jobs were found for 1332 unemployed youth, and 157 poor bright students were awarded scholarships for vocational training.
Also in 2010 ERC undertook several new initiatives to improve the employability skills of youth (such as the art of facing interviews and writing CV’s). During the year 8 so-called mega job fairs and 125 mini job fairs were held, each of which were very well attended by job-seekers.

Under BMI a successful micro-finance program is in operation, in 2010 showing an impressive growth of 34 % , whereas the number of branch-offices was increased to 13. Loans have been provided to approx. 19.000 beneficiaries. Total exposure amounts to LKR 500 mln (Euro 3,25 mln). For its operations external funds were acquired from i.a. the NDTF of Sri Lanka, the Stromme Foundation (Norway) and the Consorzio Etimos (Italy).
BMI intends to become one of the best micro-finance institutions in Sri Lanka and South Asia. It already enjoys widespread recognition; representatives of MF institutions in Sri Lanka and abroad (including China ) make visits to the BMI, to learn from our operations, which are based on the so-called cluster-credit-plus-approach system.

The BDS and BMI activities in Thirappane, 30 Kms south of Anuradhapura, - started in early 2007 - comprise rehabilitation of irrigation structures, rain water harvesting, provision of safe drinking water, as well as a safe motherhood project and medical assistance for elders and disabled. A micro-finance programme was also started (goat keeping, poultry, vegetable selling, small shops).

Several welfare institutions continued to be granted financial assistance in 2009, to improve the quality of life of orphans and elders and for the improvement of sanitation and other facilities: the Home for the Elders in Kandy, the Lankadhara Girls’ Home in Colombo, the Lakshmi Boys’ Home at Walana near Katunayake Airport, and the girls vocational training school of the Sisters of the Holy Angels in Kalutara. 

January 2011
Hein Princen, Chairman
Berendina Stichting
Amstelveen, The Netherlands

Berendina Development Services - Chairman’s Message

In 2008 when planning for the 2009 program we had to decide whether we should plan for “exit” from divisions we have worked for a long time like Yatiyantota. However after reflection we realized that there still remains a significant number of poor who have not been able to move away from poverty despite our work over the years. The key reason been our work for the poorest was focused on health and sanitation and our income generation work was focused more on enterprising poor. This has been the case with all development assistance in the last few decades. This meant that the poorest which consists of “economically active” but un enterprising such as unskilled labor was left behind. Secondly “economically inactive” such as aged and those with ill health did not receive support. Berendina was first and foremost a “charitable” organization and now a development/charitable organization. Thus unlike other development agencies we cannot forget the poorest the group the founders were most concerned about.

However it was a great challenge to address poverty of these groups. Unlike enterprising poor they needed handholding, individual attention, motivation .They do not come to seek assistance we have to seek them. They have to be identified with the help of other villagers. Household focused interventions have to be done not easier ‘community” based interventions. Staff has to walk and climb for hours to reach homes as the poorest live away from the road. As they do not like to take or cannot afford loans they have to be given grants. Training and advice becomes essential not optional. Staff has to help them to identify potential income generation activities together with them. Hence it becomes a joint investment by BDS and them. The focus has to be on measurement of growth in income through interventions not repayment of loans. 

The second group who are economically inactive is provided with a monthly allowance to supplement the small Samurdhi allowance. We hope that the government will sooner or later modify the Samurdhi scheme to pay them a living allowance than pay over 30% of the population a meaningless small payment as done now.

 The Director in charge of BDS Mr.Jagath Godakanda and the staff specially the project officers in Rural, Plantations and Dry Zone took up this challenge and have worked with 350 families laying the foundation for removing them from poverty. It was a pleasure to see these young “project officers”  under the Director’s guidance taking on this challenge to remove poverty with dedication and commitment going far beyond the responsibilities’ of an employee. We were also fortunate in 2009 to recruit a very experienced and dedicated General Manager for BDS.

We are also happy that key programs such as Employment Resource Center, Plantation Program and Dry Zone Program have made measurable impact. ERC smoothly took on the challenge of charging employers, plantations expanded to 22 estates. Our next challenge would be to bring greater sustainability to our programs so that we can move to new estates and villagers in years to come.

In total the program resulted in 13,546 households improving their quality of life.

On behalf of the Board and staff I wish to give our heart felt thanks to late Ms.Berendina Borst late Ms. Mudalige and all the past and current Chairmen/ Directors of the Berendina Stichting for making all this possible.

 Dulan De Silva
 Chairman

Berendina Microfinance Institute- Chairman’s Message

Year 2009 saw BMI becoming 77% financially self sustainable and 100% operationally sustainable after a mere 2 ½ years of operation.  We opened 3 new branches one in Maskeliya  in Nuwaraeliya district targeting mainly plantation residents and the other in Dehowita and Galigamuwa  in Kegalle district. The branch net work grew to 7 and total active borrowers grew to 15,350 of which 64% were women. Portfolio at risk (1 day) remained low at 2.73%
Berendina program is considered a model in Sri Lanka for use of best practices and for efficiency. Thus number of agencies have requested study tours of BMI program for their and this is offered at a nominal rate. MFI’s such as Agro Micro Finance, LOLC, Palm Foundation, Pragathiseva Foundation, and representatives from Ministry of Finance and GTZ –Promise visited our field program    during the period under review.
We are now the largest micro finance agency working in plantation areas one of the least served segments by  micro finance in Sri Lanka . Most agencies were reluctant to serve this depressed community due to the difficulties faced in doing so. We consciously decided to commence and expand the program in plantations as this was recognized as one of the poorest segments of population even in the last 2002 population survey. Whilst poverty in rural and urban areas fell significantly in the decade ending 2002 this was not so in plantations. Our work has helped plantation workers to raise cattle , grow vegetables and do other trades and services to reduce income poverty. They have also been able to repair their houses and electrify them with our asset building loans. Significantly we developed different strategies to meet credit needs of both plantations workers and non workers.
The work in plantations together with the expansion of the small emergency loans available to poorest families for health , education or family  crises helped to keep our strong poverty focus in tact. This is an innovative product using village agents living close to the beneficiaries to retail loans.
One of the important new initiatives done during the year was to commence “impact studies” of a random sample of our loan beneficiaries .The study was done using external enumerators and random sample chosen using SPSS statistical package . The first study was in Gingathena branch and 131 were chosen to be interviewed. Of this 86 took income generation loans and 45 took asset building loans. Of the 86 that  took income generation loans as much as 55 reported increased in profits after the loan, 24 has started new businesses, 44 reported increase in quality of products, 39 reported diversifying products after the loan . The only negative point was 6 of the borrowers have not used the loan for the purpose intended. We intend to do such studies on a regular basis and we are one of the first MFI’s to commence such studies.
BMI due to its poverty focus and social mission wants to commence Social Performance Monitoring. For this purpose the Director in charge of the program and 2 staff members attended a training program on Social monitoring conducted by an Indian institution EDA Rural Systems. In 2009, we continued our strong stress on staff training sending 25 staff for CGAP Training Programs on Accounting, Financial Analysis & Delinquency Management and 5 staff for Diploma in Microfinance.  
BMI follows a credit plus approach with enterprise development services(EDS) offered based on demand and on a payment system based on coupons issued with the loans. Though the system is innovative our services need further improvement and in 2010 we will give priority to  improve quality of  EDS services on offer.
Another reason for our success is the computerization of the microfinance operation. BMI worked with a software company  to increase efficiency, accuracy and transparency of the information as per microfinance best practices. Currently 6 branches and 4 cooperatives computerized.
During the year we developed a partnership with EITMOS in Italy to receive funding in addition to Berendina Stichting the founding agency and NDTF the former financial partners. We also got technical assistance from GTZ ProMiS for computerization staff training and plantation sector work. We also completed negotiating with Cordaid a Dutch development agency to receive both grant and loan funds to commence operations in Eastern Province in 2010. We thank these agencies  for the confidence placed in our work.
We intend to remain focused on our original objectives in creating this program and institution. These relate   primarily to  poverty reduction.  We will do this by not allowing average loan size to rise rapidly, by developing focus on products for non entrepreneurial poor, by focusing on poor areas such as plantations and Eastern province.
Our special project “Rebuilding Lives with Sustainable Employment” with National Lottery UK funding and in partnership with APT Enterprise Development UK completed 2 years. This program has issued 311 loans(part grant) to employers and more importantly created 1394 new employment opportunities  in tsunami affected areas of Batticalo, Trincomalee, Ampari , Galle and Matara. With this experience in working in Eastern Province Berendina is keen to play a role in rehabilitating war affected people of East to rebuild their lives.
I wish  to thank all the staff and other stakeholders who made this performance possible and in particular to Mr. Anura Attapatu for the leadership given to the core  micro finance program. I also thank Berendina Stichting for initiating these programs and for continued support for all our work.

 Dulan De Silva
 Chairman