Presented by

Project Consultancy Unit Of

Sarvodaya Economic Enterprise

Development Services (Guarantee)
Limited – SEEDS

Cheryl de Jonk, B.Sc (London), PMP

Project Coordinator-Financial Sector
 Consultancies for developmental sector
projects of governmental, non-governmental
and private organizations

 PCU is the focal point of expertise of all

divisions/ units of SEEDS

 Implements diverse array of projects in line

with great philosophy of Sarvodaya Movement
FOCAL AREAS:

 Microfinance
 Enterprise Development
 Livelihood Development
 Competency Building
 Business Development Services
 Leveraging Remittances
for
Socioeconomic Development in Sri
Lanka

(Funded by the UN-EC Joint Migration for

Development Initiative)
 Total foreign revenue generated by Sri Lankan
migrant workers US $ 3.3 billion in 2009

 14 % increase in inward worker remittances to

Sri Lanka between 2008 to 2009

(Source: Sri Lanka Bureau of Foreign Employment)

 In 2009 average per capita remittance to Sri
Lanka US $ 164 compared to South Asia’s
average of about US $ 35.
(Source: Ministry of Finance and Planning)
Income Quintile (Q) Income Range (US $ Region
per month)
Q1 Less than 150 Middle East
Q2 150 – 299
Q3 300 – 544 Middle East and Asia
Q4 550 – 1,000 Europe and Asia
Q5 More than 1,000 Europe, Asia, America

Q4 and Q5 subdivided into 03 Remittance Socioeconomic Groups

Based on social and remitting behaviour

 Purposes of use Income Groups (remittance from Europe)

Remi-1 Remi-2 Remi-3

Consumption 62.3% 2% 23.1%

Housing and 26.3% 27.1%

household assets 6%

Business investment 1% 7% 15.0%

Savings 4.4% 29.2%

82.2%
Other expenditure 6% 2.8% 5.8%
 Remittance from Europe represents the highest
value in per capita terms

- approx 400 Euros/ Rs. 60,000 per month

- (approx 48,000 Euros/ Rs. 7.2 lakhs per

annum)
(Source: SEEDS field survey data)
 Usual poverty parameter- Monthly income

But…
Remittance Receivers of Remi-1
 Overall monthly cash balance is minus
 Low level of social development

Remittance Receivers of Remi-2

 Save money on simple financial instruments
 Opportunity cost – forego investment income

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 Start a business or
invest

Work and earn in All for

Europe Consumption

Bankruptcy or loss
of investment
 Promote socioeconomic development in Sri Lanka
by;

- encouraging senders to shift from informal to

formal channels

- creating incentives for recipients and

returnee migrants to invest remittances on SME
development, financial and capital market
instruments

(instead of over-spending on consumption)

 Sender side – Sri Lankan migrants in Italy,
Germany, France, Netherlands and Cyprus

 Fall into 3 categories:

1. Legal migrants remitting through formal
channels
2. Legal migrants remitting through informal
channels
3. Illegal migrants remitting through informal
channels
 Create (indirect) incentives for legal migrants
using informal channels to shift to formal
(induce financial sector and policy bodies)

 Provide recipients/ returnees with remittance

literacy, SME and technical training

 Facilitate direct linkages to financial institutes

for investment and business development
purposes
 Remittance is end product

Need to add marketable features to remittances

Provision of preferential treatments for remittance

receivers’ families

Policy level and financial sector interventions

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 In Sri Lanka, there is no problem in
disbursement of remittances

 Microfinance institutions are required to

 Develop SME development financial products
 Educate receivers to invest on sustainable
businesses
 Link receivers with banks to invest on advanced
financial instruments
 Provide pre-departure remittance literacy
Sri Lankan migrant in Europe Europe
(Exporter)

Remittance receiver tends to

buy imported goods

Increase the aggregate

demand for imports

Increase deficit of BOP

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 Sri Lanka Bureau of Foreign Employment

integrate migrant returnees to

Sri Lanka’s Society

Liquidate skills & knowledge Educate for next

trip

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Thank You

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