In a globalised world, small communities are exposed to social and economic marginalisation on an unprecedented scale. As part of the Energy Services Delivery Project in Sri Lanka, the Sarvodaya Economic Enterprise Development Services is attempting to prevent severe marginalisation of remote communities. The mission is to ‘eradicate poverty by promoting empowerment for a sustainable livelihood’. One approach has been to establish a credit scheme to enable local people, who have no grid electricity access, to gain access to solar home systems.
Sarvodaya Economic Enterprise Development Services
Sarvodaya Economic Enterprise Development Services (SEEDS) is the economic initiative of the Lanka Jathika Sarvodaya Shramadana Sangamaya (the Sarvodaya Movement), which is a voluntary, non-governmental organisation. The movement was founded in 1958 with the aim of empowering people and communities in Sri Lanka. Incorporated by an Act of Parliament in 1972, Sarvodaya has the distinction of being the largest indigenous NGO in Sri Lanka; it is a national movement with linkages at the global level.
During the past four decades, Sarvodaya has created a vision of a new social order, influenced by the ethos of non-violence voiced by Ghandi in line with the teachings of the Buddha Dharma. Consistent with this vision, efforts focus on bringing about changes within concrete communities through a process of social awareness, welfare and community action. This is achieved through the island-wide network of Shramadana Societies, the bedrock of collective social action. Fundamental to the success of this process is the participation of the people, which is the foundation of all the Sarvodaya programmes.
Each Society, while being an integral part of the larger community, also maintains its own autonomy. Sarvodaya’s rural outreach involves over 12,000 village communities and an integrated economic programme covering over 5000 villages. The social infrastructure in a typical Sarvodaya Village creates its own dynamic and includes all social groups.
The Sarvodaya Shramadana Movement in Sri Lanka was started by A.T. Ariyaratne in 1958. At the time, Ariyaratne was a young teacher of science in a prestigious school in Colombo. The early beginnings of this vast movement were holiday work camps in villages, which Ariyaratne organised with the help of his students. In the first project, Ariyaratne selected a remote, outcaste and destitute village. The participating students were asked to live with the poor villagers in their huts, share their meals and share their work. The students helped the villagers dig roads, plant trees, dig wells and with other activities. They learned first hand the problems and concerns of the poor villagers, their hopes and fears, and the constraints they faced. The students learned the meaning of ‘shramadana’, the giving of one’s time and labour as a gift. However, ‘dana’ is more than just ‘giving’; in the process of giving ‘dana’, the giver achieves self-respect and self-esteem, and also a sense of peace. Sarvadoya is Sanskrit for the ‘awakening of all’.
‘We look at development as an awakening process for all – Sarvodaya. This awakening has to begin with oneself with every individual, then extend to the family, the country, the nation and the world. The awakening must be an integrated whole where spiritual, moral, cultural, social, political and economic aspects of life are included.’
Ariyaratne, 1997, at a meeting to discuss the UNDP Human Development Report
By the late 1970s, the Sarvodaya Movement became capable of reaching nearly every part of Sri Lanka. The programme of self-reliance, community participation, and community ‘awakening’ appealed not only to the people in poor communities, but also to donors. Thousands of young women and men learned how to motivate and organise people in their own villages to meet basic human needs, ranging from a clean and adequate drinking-water supply to simple housing and sanitation, communications facilities, an energy supply, education, and ways of satisfying spiritual and cultural needs.
By the mid-1980s Sarvodaya Societies had established themselves in several thousand villages all over the island, and it was felt that these institutions should be equipped to play a more significant role in the economic lives of their members. In an environment that risked the marginalisation of village life, there was a growing need for village-level institutions which could offer inputs in response to the fast-changing aspirations of rural people, and at the same time develop the economic and financial capacity of the village.
In 1986, SEEDS was established to address these needs. SEEDS enables Sarvodaya members to pursue their income-earning activities more successfully. SEEDS makes capital available at fair rates of interest, while also providing training, information and advice towards improving their business and technical skills. Through this approach, SEEDS strengthens the existing options open to people and increases the diversity of their options. This makes small enterprise development a viable alternative.
Today, SEEDS works with nearly 2400 village-level societies across 18 of the 26 districts in Sri Lanka, through a total staff of over 450. SEEDS has granted over SLRs.1.3 billion worth of loans from central funds, and provides 50,000 small businesses with services through training inputs. In addition, it has played a key role in fostering and encouraging village savings, which now total nearly SLRs.470 million. From village savings alone, Sarvodaya Societies have granted SLRs.689 million in loans to their members and more and more of them are able to act as credible and autonomous village banking units.
SEEDS in a Nutshell
- It provides training in new skills and economic activities and the long-term support required to ensure their sustained application.
- It introduces new technologies – both improved techniques for traditional and non-traditional crops and non-farm economic activities.
- It encourages the formation of groups within the village societies to undertake joint economic activities.
- It lays great stress on the development of market linkages between its producers and end-clients. Sarvodaya members currently sell a wide range of goods, now including solar home systems, through market linkages facilitated by SEEDS.
- It defines its long-term developmental strategy in terms of the creation of sustainable linkages between specialist technical agencies and its clients. Already, many such agencies are active in the provision of skills and inputs to SEEDS’ clients.
- Loans range in size from the very small for first-time borrowers to as much as SLRs.500,000 for those who have graduated through multiple successful loan repayments.
The objectives of SEEDS are:
- To provide access and opportunities to the community for equal economic empowerment.
To create and develop an enabling and sustainable grassroots level infrastructure for social and economic empowerment.
- To promote entrepreneurial, savings and credit culture for economic development.
- To create and promote an environment for equitable participation of gender, ethnicity and religion throughout SEEDS’ activities.
- To foster a spirit of participation, professionalism and dedication, and provide fulfilment and opportunity for its employees.
- To become a sustainable alternative financial development institution for the provision of micro-finance and enterprise development services.
As part of these objectives, SEEDS has established a project of financing alternative energy systems. In Sri Lanka, focus has been upon so-called ‘solar loans’ to provide finance for solar home systems. In December 2002, SEEDS became a Participating Credit Institution (PCI) under the World Bank sponsored Renewable Energy for Rural Economic Development (RERED) project, which is a follow-up initiative to the ongoing Energy Services Delivery (ESD) project. During 2002-03, SEEDS doubled its financial commitment to investments in the solar home systems sector in Sri Lanka.
The Renewable Energy for Rural Economic Development (RERED) Project aims to foster rural economic development and improve the quality of life in rural areas by providing access to electricity derived from renewable resources. The RERED project provides medium to long-term loan finance to private establishments, NGOs, co-operatives and individuals for grid connected and off-grid community-based or household-based renewable energy projects. At the outset, the project aimed to provide electricity access to 100,000 rural households through solar home systems and independent mini-grids fed by micro-hydro systems, wind and biomass generators. It also aimed to electrify 1000 small and medium rural enterprises through renewable energy resources, and add 85 MW capacity through grid-connected renewable energy power plants.
Financing Solar Home Systems
The original project to disseminate solar home systems (SHS) was slow to take off. The mid-term goal was to install more than 6000 SHS, but by February 2000, the total of installed systems was only 723. The poor performance was put down to inhibiting technical and implementational issues, such as small loans and a lack of local technical knowledge and capacity. However, with the added financial impetus of the RERED project, a total of 18,619 SHS had been installed by the end of June 2002, with an average of 1000 SHS being installed per month. This rapid turnaround in project achievement has seen the ‘solar loans’ become a flagship product of the SEEDS project. The SHS lending programme has subsequently earned much prestige, being cited as a success story at international forums and in various academic and popular publications.
‘It’s a win-win situation. If the companies provide good services, good marketing, it’s good for SEEDS, and good for the community. Same way the market companies will benefit if we have a good loan products service and so on. So its synergy and a win-win situation.’
Mr K.W. Kirimenika lives with his wife and four children in a permanent house at Badanadura village in Ratnapura District. He works as a farmer, with help provided by his wife. Before they were aware of SHS, his family used to spend about Rs.600 for kerosene, Rs.200 for recharging the battery and Rs.100 for the dry batteries. The moment Mr Kirimenika met a SHS salesman and was offered a SEEDS loan was a turning point in their lives. The purchase of a 32 watt SHS means that the family now enjoy longer hours of power every night. The repayment of their loan is more than offset by the savings they make on kerosene and batteries.
‘I never believed that the sun could make our life brighter and safer even at night.’
‘…the SHS makes kitchen work easy, and saves my day time. Now I can prepare meals even at night. My husband is old now. Before SHS, he has to carry the battery to the town to recharge it. The solar home system changed all that. It is a great convenience in our lives.’
‘It’s easy for us to study because there is light.’
The solar loans have improved the living standards of rural households in Sri Lanka. Households like Mr Kirimenika’s, which previously had no access to grid electricity or any prospect of obtaining access, can now use their SHS for primarily domestic use, such as helping children in their education and alleviating women of their often too-heavy domestic workload.
SEEDS’ solar financing has transformed the solar photovoltaic (PV) market in Sri Lanka. With new companies joining the market, in 2002 SEEDS entered into partnerships with three SHS suppliers: Access International Ltd, SoftLogic Solar Ltd, and E.B. Creasy & Company Ltd, which has enhanced the solar project – SEEDS now works with six SHS providers.
For technical information on the building, maintenance, and application of solar home systems see the Hands On programmes ‘A Switch in Time: The Solar Sell – China’ and ‘Making the Connection: Batteries Not Included – Sierra Leone’ (http://www.tve.org/ho/doc.cfm?aid=1607); and the ITDG technical brief ‘Solar (PV) Energy’ (http://www.itdg.org/?id=technical_briefs).
International Resources Group. (2003). Impacts Assessment and Lessons Learned: World Bank: Sri Lanka Energy Services Delivery Project.
SEEDS. (2003). SEEDS Annual Report 2002-2003. Sri Lanka: SEEDS.
Energy Services Delivery Project
Global Environment Facility (GEF) www.thegef.org
World Bank: ASTAE www.astae.net/content/asia-sustainable-and-alternative-energy-program
Donor and Supporting Organisations
Department for International Development (DFID) www.dfid.gov.uk
World Bank www.worldbank.org
ITDG Technical Briefs answers.practicalaction.org
Related Hands On case studies
Batteries Not Included – Sierra Leone
Sunny Side Up – Cuba