Women's banks are flourishing in Sri Lanka but there are questions about whether they really make a difference to poverty.
By Samanthi Dissanayake
BBC News in Sri Lanka
There is barely space to move in Philomena Aranasingham's front room. She lives in the Kirullapone slums in the heart of Colombo, moments away from a still waterway with sewage floating by.
Philomena has started a lucrative tailoring business with her loan
Her room is swamped with red velvet curtains and silk shirts. She runs a lucrative tailoring business from here.
"Five years ago I had nothing. Now we have comfort at home, a phone and our children can go to school without shame."
The drapes are a major commission from the Sri Lankan army.
Philomena was the first recipient of loans to women from the Grameen bank, which has operated in Sri Lanka for almost six years.
From a blast to a bank
When a bomb ripped through the Central Bank of Colombo in 1996, Lalith Kotelawela, one of the wealthiest men in Sri Lanka and head of a giant hotel and banking conglomerate, was among the injured.
It was while recuperating in hospital that he was inspired by Bangladesh economist Muhammad Yunus' book about micro-credit schemes aimed at the very poorest women in his country.
He decided to import the 'Grameen' concept to his own country.
The bank has now lent to 78,000 women on the breadline throughout Sri Lanka, exactly the kind of women who wouldn't normally qualify for loans from banks.
Two doors down from Philomena's home, Laxmi Priya, another beneficiary of the Grameen bank, crouches over a wok of boiling oil frying snacks to sell on the street.
"Before, we only had a small wok. Now we have gas cooker, a big pan and money to employ one person. Life is a little easier for us these days."
Laxmi and her husband Nadaraj live, eat, fry and sleep in one room.
Women's banks are nothing new to Sri Lanka. Women have long pooled savings to provide loans for each other using a kitty system.
Loan repayment day at the Kirullapone slum community centre
In the late 1980s, grassroots women's groups in villages throughout the impoverished Hambantota province set up informal banks, where village girls studying A-levels handled all transactions.
These groups became the Janashakthi Bank Society, where to join a woman must have an income below the official poverty line.
Grameen also lends to those least able to repay loans and at minimal interest. Transactions take place in the heart of the community in temples, churches and village halls.
It represents the involvement of a major commercial player with serious networks, money and banking experience. The bank has a 100% repayment rate according to Victor Ratnayake, its deputy chairman. He says this is because they lend only to women.
"Women have the stability of the family at heart. Men would use the money for drinking and entertainment. Our country needs to invest in women. This is the way for us to move forward."
The loan structure is probably the key to its repayment rate. Women come up with ideas for their own businesses and form small groups to qualify for a loan. If one group member defaults, the others are held responsible.
Low income traps
But some argue that a vibrant women's banking sector has not delivered enough change.
"Women are just a little bit better off than they were. Debt is less of a problem but income levels have not risen substantially," says Professor Swarna Jayaweera of the Centre for Women's Research in Colombo.
"These schemes work well to lift women out of absolute poverty as they do in India and Bangladesh." She argues that Sri Lanka needs more investment in management and marketing expertise - not small loans to enable women to keep their tiny cottage enterprises just ticking over.
Laxmi and Nadaraj are a case in point. The lease to their all-purpose cell has run out. They need to find another place, preferably with a toilet, as Laxmi is heavily pregnant.
"Without property of our own whatever we earn from our business goes on rent." They survive but see no way of escaping a low-income cycle.
Lending only to women isn't necessarily the recipe for harmonious relations between man and wife.
Victor Ratnayake has been chased down the street by a knife-wielding husband, irate that food had not been appearing on the table ever since his wife was diverted into self-employment. The husband eventually came round.
Mr Ratnayake maintains that teething problems disappear when the overall benefit of the loans became clear.
But this assertion is met with scepticism by the Rural Women's Organisation Network, a small group operating on the southern coast.
Women in Weligama need homes before they can restart businesses
"Husbands do allow the women to get self-employed, but whatever income they generate goes straight into their pockets," says Soma Hettige, secretary of RWON.
She helps women battered by husbands trying to extract money for gambling. In her experience, wifely earnings do not magically summon up reason if dearly-held patriarchal structures are undermined.
After the tsunami
The area RWON works in was devastated by the tsunami.
"I had a small fruit stall. I don't even have a home now," says Somavati on Weligama beach.
Yet the old financial self-help groups still exist, lingering on the beach by the ruins that were once homes. They have been transformed into social networks in the aftermath of the disaster: "We're all friends. They can build in my garden," says Jayavati a group leader.
These women have plans to start again their spice shops and food stalls. They will use loans for women to help them on their way.