2005年-世界发展银行全球_Sri_Lanka___Improving_Access_to_Financial_Services_Selected_Issues_122页_2mb

Summary of "Improving Access to Financial Services in Sri Lanka"

Core Content

This document, published by the World Bank in 2005, explores the challenges and opportunities for improving access to financial services in Sri Lanka, with a focus on small businesses, agriculture, and rural remittances. It provides a comprehensive analysis of the current financial landscape, highlights the gaps in service provision, and offers policy recommendations to enhance financial inclusion and market efficiency.

Main Issues and Key Findings

1. Financial Landscape and Underserved Markets

• Financial Services Importance: Access to financial services is crucial for households and enterprises to support economic growth and poverty reduction.
• Financial Depth: Sri Lanka's financial depth is low, with private sector credit at about 35% of GDP in 2004.
• Regional Disparities: Financial services are unevenly distributed, with the Western Province receiving more net savings transfers, exacerbating rural poverty.
• Service Gaps: While most households have access to basic financial products, access to a broader range of services is limited, especially for small and rural enterprises.

2. Expanding Financing Opportunities for Small Businesses

• Challenges for Commercial Banks: Limited branch networks in rural areas, high transaction costs, and lack of market information hinder small business financing.
• Government Role: The government should act as a facilitator rather than a direct participant, creating a conducive environment through macroeconomic stability and legal frameworks.
• Policy Recommendations:
  • Promote a stable macroeconomic environment.
  • Strengthen the legal framework for creditors' rights, asset securitization, and movable collateral.
  • Collaborate with the financial sector to expand credit information on small businesses and consumers.
  • Mitigate entry costs for commercial banks into high-risk markets.
  • Monitor and disseminate information on lending patterns to underserved markets.
  • Encourage modernization of the credit information bureau and development of new financial products.

3. New Financing Mechanisms for Agriculture through Supply Chains

• Agricultural Risks: Agriculture is vulnerable to price volatility and weather risks, with fragmented supply chains limiting access to credit.
• Opportunities for Innovation:
  • Warehouse Receipt Financing: Can be developed for non-perishable commodities like pepper and tea, offering a way to secure lending against stored goods.
  • Value Added and Agricultural Service Centers: Can integrate primary producers with markets and financial institutions.
  • Contract Farming: Requires better coordination and incentives to improve creditworthiness of farmers.
• Policy Recommendations:
  • Facilitate coordination among stakeholders to strengthen agricultural supply chains.
  • Collaborate with the private sector to develop international brands like "Ceylon Cinnamon."
  • Create a modern and commercially oriented legal framework for rural cooperatives.
  • Develop regulatory frameworks to support warehouse finance receipts.
  • Explore public-private partnerships to improve logistics and develop new financial instruments.

4. Enhancing the Outreach and Quality of the Rural Remittance Infrastructure

• Remittance Infrastructure: Informal networks dominate remittance flows, especially in rural areas, despite the benefits of formal systems in terms of foreign exchange reserves and risk management.
• Need for Formalization: There is a need to improve the quality and outreach of the formal remittance infrastructure, particularly in rural areas where over 65% of remittances are directed.
• Policy Recommendations:
  • Promote financial education for migrant workers.
  • Negotiate bilateral initiatives with key remittance source countries.
  • Harmonize and improve the efficiency of electronic funds transfer systems.
  • Encourage linkages between banks and non-bank financial institutions, including Sri Lanka Post.

5. Leveraging the Postal Network to Deliver Rural Financial Services

• Postal Network Potential: Sri Lanka Post has a dense network in rural areas, making it a strategic partner for financial services delivery.
• Current Limitations: Financial services are provided through outdated manual systems, leading to inefficiencies and inaccuracies.
• Modernization Needs: A comprehensive strategy is required to modernize the postal network, including integrating it with the financial sector and promoting the use of ICT.
• Opportunities: The postal network can be used to deliver a range of financial services, including insurance and long-term savings products.
• Policy Recommendations:
  • Develop new partnerships with private financial institutions.
  • Wind down the unproductive exclusive agency agreement between the National Savings Bank and Sri Lanka Post.
  • Initiate modernization with priority business lines such as remittances.
  • Encourage the development of new financial instruments through the postal network.

Conclusions and Policy Recommendations

The report concludes that despite some progress in financial development, Sri Lanka still faces significant challenges in providing adequate financial services to underserved groups. Key recommendations include:

• Downscaling Private Commercial Banks: To reduce concentration and improve access.
• Enhancing Agricultural Financing: Through supply chain integration and new instruments.
• Improving Rural Remittance Infrastructure: By promoting formal systems and expanding outreach.
• Leveraging the Postal Network: To deliver financial services more effectively in rural areas.

The report emphasizes the need for a balanced approach between public and private sectors, with the government acting as a facilitator and regulator to support market development. It also highlights the importance of modernizing financial systems and improving information flow to enhance financial inclusion and economic growth.