Home » Govt. extends rural financing program for tea and rubber small holders

Govt. extends rural financing program for tea and rubber small holders

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The Government is set to extend the Small Tea and Rubber Estate Restoration Project designed to assist the targeted smallholders to improve their food security with the assistance of the International Fund for Agricultural Development (IFAD).

The Cabinet of Ministers at its meeting on Monday approved extending the period of the ‘Rural Financing Program’ till 30 June 2023.

The Government and the International Fund for Agricultural Development entered into an agreement in 2016 for implementing this project.

The ‘Rural Financing Program’ is implemented under that project and is scheduled to be wound up from 31 December and Rs. 172.35 million from the allocated sum for the said program is to be released to the beneficiaries as loans.

The total project cost over six years is estimated at Rs 8,502 million (US$ 65.4 million) including contingencies (USD 3.8 million).

The Project costs are organized into: (i) tea smallholder’s development (69% of total base costs); (ii) rubber smallholder’s development (22%); (iii) inclusive rural financing (6%); and (iv) project management (4%).

The Project area was in seven neighbouring districts in central and southern Sri Lanka, including Galle (tea), Matara (tea), Ratnapura (tea and rubber processing), Badulla (tea),Kandy (tea), Monaragala (rubber) and Ampara (rubber).

These districts have been selected based on their poverty incidence, production of tea and potential for rubber. A total of 144,000 people, or 32,000 households, would benefit from the Project

The Ministry of Plantation Industry Is the lead project agency with the private sector playing an active role in the project through business models to strengthen technical assistance and capacity building efforts that the public agencies are providing.

The Bank of Ceylon and the People’ Bank are also partnered with the project to provide smallholder access to their existing financial products for tea and rubber.

A project management unit was established at MPI, the existing structures within the Tea Small Holding Authority (TSHDA) and the Rubber Development Department (RDD) are being used to implement the Project.

Where required, the extension staff were supported by use of technical assistance, implementation support and recruitment of Animators. Services of an experienced service provider would be competitively recruited to assist in mobilizing smallholders.

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