Small Business Offer Sri Lanka’s War-Weary a Second Chance
Sri Lanka is at a unique stage in its history, as the country moves forward following a 26-year civil war. Propelled by economic disparities among ethnic groups, the conflict decimated the country’s infrastructure, government institutions, business enterprises and productive assets.
VEGA’s eight-year BIZ+ program in Sri Lanka, implemented by VEGA Member Land O’Lakes International Development, recently received a two-year extension due to its success in stimulating economic growth, job creation and increased household incomes in post-crisis and under-developed areas of the country. By providing SMEs with technical know-how and investment grants requiring a 1:1 match by the SMEs, the program has surpassed the original job and income goals by creating more than 6,647 jobs, leveraged over $14 million private sector funds, benefited 4,383 micro-enterprises and entrepreneurs and 8,840 households, and increased incomes of Sri Lankans by more than $8 million.
Since 2011, 26 highly skilled U.S. and international volunteers have contributed approximately 1,500 volunteer days, in addition to the service of at least seven local volunteers, assisting entrepreneurs on a range of topics, from financial skills to marketing and branding. One such entrepreneur is Rejin Thileepan, owner of Yharl coconut mill, who felt compelled to support his community after the 26-year civil war that ended in 2009. “Women were widowed and without jobs. We wanted to help,” he said. “That’s when we put in a grant proposal to Land O’Lakes International Development—we wanted to expand to coconut oil production. That type of mill would not only help our business grow but also provide job opportunities.”
The business grew from just two employees to 34 who now have steady incomes, savings accounts and a supportive community to call home. Kanni Mankaytkarasy has scars on her hands as remnants from her time fighting on the frontlines. She picks up a coconut and cracks it open with the swing of a machete. “We all rotate jobs each day. It makes me happy to see the process and the final product of our work,” says Kanni, smiling.
“The BIZ+ program is remarkable because it is made up of determined women and men who not only want to succeed but are also committed to seeing their communities improve. That is why a hallmark of BIZ+ businesses is their focus on how they can employ, train and partner with their community so that they benefit as a whole. This is how BIZ+ is helping to provide war widows, the disabled, survivors of gender-based violence and other vulnerable populations with hope for a brighter tomorrow.”
– Andrew Sisson, Mission Director, USAID/Sri Lanka
Helping to build an ice factory that could transform economic opportunity throughout the seafood value chain was one of the first catalytic investment grants made by BIZ+. Access to an effective cooling mechanism is imperative for transporting fish and keeping it fresh, particularly in tropical climates like Sri Lanka. But until Thinuravukkasu Senthan opened his ice manufacturing plant in Jaffna and grew it with assistance from BIZ+, small fishermen and traders struggled to earn a viable and reliable income from what they caught.
“We used to experience a 10-20% loss of our catch during transport. If we could earn 400 rupees ($3) per kilo on a good day, we’d only get 200 rupees per kilo if the catch was damaged or wasn’t sufficiently cooled,” explained Mariahonesteen Nirojan, a large fish seller in Jaffna who sells in bulk on behalf of 40 local fishermen to about 20 regular customers. He added, “Now that we have ice, we can ensure that everything sells for the same amount, and set a higher overall price for what we catch.”
“NGOs used to come here and do charity work, establishing orphanages, roads and sanitation, but not doing anything to strengthen business and industry,” Mr. Senthan recalled. “The BIZ+ program means people are not just getting a handout, but a real salary. We don’t want charity anymore. If you give us free eyeglasses and reading materials, they will vanish someday. But if you create employment, we can buy those things for our kids ourselves. An entrepreneur will not allow his company to fail. We have to grow.”
Known as Jeyantha Industrial Park (Pvt) Ltd, the new 20 ton-per-day ice factory is harnessing the untapped economic potential of aquaculture in an area that was devastated by war. Prior to BIZ+, Mr. Senthan had already secured commercial bank loans to manufacture six tons of ice per day, but he struggled to meet local demand. Within three months of submitting his business plan, Mr. Senthan learned he was successful and began rushing to secure the cost share required by BIZ+ to facilitate his business’ growth. Jeyantha Industrial Park contributed about $200,000 for the land and factory construction, while the BIZ+ grant of $266,000 covered the purchase, transportation and installation of the new 20-ton per day ice factory’s machinery. Mr. Senthan purchased the land from his uncle, and built his dream ice factory atop the detritus of his uncle’s former prawn export company, which was destroyed by mortars during the war.
Ice not only enables fish to remain fresher at the market, but it allows fishermen to work for longer durations without having to return to shore. According to a small-scale fisherman and day boat operator named Santhan (no relation to the owner of Jeyantha), “The availability of ice in Jaffna has helped us to make three catches in a night compared with one. Previously, we would only go out to sea at about 4 am and return by 6 am, so that we could get the fish to the market before it spoiled. Now, we leave at about 5pm the previous evening and fish all night.” He is now earning over US $100 a day.
Not only is Jeyantha Industrial Park already operating at full capacity thanks to USAID’s support through BIZ+, selling crushed and blocked ice to some 60 regular customers a day, but about 15-20 new multiday boats have started fishing in the harbor since the new ice factory began operation. The 23 new staff members, most of whom were previously unemployed youth, are now earning a locally competitive salary equivalent to $152-$167 a month, plus a bonus incentive. Now that his business is solid and steady, Senthan plans to expand his business into related areas such as fish trading and processing in the coming year.
Mr. Senthan is extraordinarily proud that he’s not only helping to change mindsets about rebuilding industry in Jaffna, but is providing proof about what kind of assistance conflict-affected communities such as his really need the most.
BIZ+ will continue USAID’s focus on achieving inclusive growth through enterprise development through 2019, and will build on the successes and lessons learned from working with businesses and delivering capacity building services.
“When we started this business it was very challenging to attract investors or to get banks to finance our business because demand for these polysacks really went down. That’s when volunteers came from the US and helped us to properly plan our financial forecast to the bank and succeeding in securing a loan. We are really happy to have a partnership with BIZ+ because without it the starting of this business would have been impossible. With their support we have succeeded and we have provided 100 plus jobs and are really happy.”
– Muhammed Sanoon, Managing Director, East Lanka Polysack
With an aim to ensure inclusive growth, support will be prioritized for small and medium enterprises that create jobs for vulnerable populations, such as ethnic minorities, ex-combatants, disabled pers-ons, youth, and women, including war widows. With a strong emphasis on private sector partnerships, this may include promoting sectors that have the greatest potential for broad-based growth, and facilitating financing for small and medium enterprises. Programming will support activities that are market-driven and that enhance the connectivity between rural and urban areas so that the benefits of growth are spread island-wide.
Learn more about this and other Sri Lankan businesses booming as a result of BIZ+ by watching the 7 short videos VEGA produced to illustrate the volunteer and development impact of the program. Visit VEGA’s YouTube Channel to watch these and other videos.
This program was also featured in FRONTLINES, here.