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news | February 11, 2011 | Sri Lanka | Rehabilitation

Small grants for a brighter future: micro-enterprise support to conflict-affected populations

Vijaya’s shop stocks a wide range of goods, quickly becoming a place of choice for purchases in the village © ACTED 2010

In Northern Sri Lanka, years of displacement caused by the 26-year civil war took a heavy toll on populations recently returned to their home communities, as a lack of means and assets makes restarting livelihoods a challenging task. In 2010, 12,000 families have returned to their home areas in Manthai West DS Division of Mannar district. With funding from OFDA through the United Methodist Committee on Relief (UMCOR), ACTED has supported 200 vulnerable returned families in Manthai West (particularly female-headed families and persons with disabilities) to start a small business of their choice. This enabled them to restart their livelihood activities, which support the stabilization of the income situation of the most vulnerable. The story of Vijaya from the village of Sornapuri and her small grocery shop illustrates the impact of such support on the lives of returned populations.

Standing alone along a dusty, pothole-riddled road amid a sea of lush rice paddy fields, Vijaya’s small grocery shop is a welcome sight for the weary traveler. Vijaya, from Sornapuri village in Manthai West, is one of the 200 vulnerable individuals and their families supported by ACTED in Mannar district, with funding from OFDA through UMCOR. Support to restoring livelihoods and providing self-employment through small enterprise creation is a core component of ACTED’s strategy in Sri Lanka, reflecting the specific needs of populations returning home after years of displacement.

A dire livelihood situation for returned populations

Damaged infrastructure in the areas to which IDPs return, lost assets and a precarious lifestyle during displacement makes earning regular and secure income the greatest challenge faced by returned families. They return home with precious little, and are generally greeted by equally little to help them generate much-needed regular income. ACTED particularly supports extremely vulnerable individuals, such as female-headed households or persons with disabilities, in a context where they are not only marginalized within their own communities, but also tend to fall through the net of other aid operations.

Vulnerable families can earn much-needed income thanks to small cash grants

To assist them with this challenging task, vulnerable families receive a cash grant of 30,000 Sri Lankan Rupees (210 Euros) along with training on a range of topics, from business management to bookkeeping, to get their business started. To ensure the sustainability and chance of success of their new enterprises, every grant recipient conducts an individual market study aimed at selecting the most suitable activity in their chosen area, according to existing demand. Cash grants are an efficient way to generate immediate improvements in the living conditions of vulnerable families, while providing them with the crucial initial support to develop sustainable livelihoods and meet their long-term goals. This approach is also more dignified than inflexible, passive in-kind assistance, giving families the choice to select their preferred way of earning income.

A new shop for a new life

“I can now manage my life and my son’s education with my new income. I feel much more confident about our future”, Vijaya confides with a beaming smile, a petite figure half-hidden behind the jars of candy and soda bottles lined up on the counter. Her smile exudes a sense of serenity, reflecting the hardships she experienced and her relief as she can now look forward. After losing her husband 20 years ago, she had no choice but to depend on her parents’ meager farming income to survive and care for her young son. The war hit them hard, and she and her family wandered from camp to camp for three years. They came home last year, to nothing. With no opportunities and no capacity to start earning income, their future looked bleak.

Being selected for a small cash grant by ACTED changed everything. Vijaya knew there was no grocery shop in her community and demand would be high. She set up the shop in her newly constructed home, and used the grant to buy all the necessary items. Her wide selection of goods, from laundry detergent to soda and vegetables, mirrors the success of the business: her turnover reaches an average of 2,000 rupees (14 Euros) per day, a comfortable amount by Sri Lankan standards. “My 22-year old son can now get a proper education”, she says, a sudden serious look on her face, as if contemplating the range of opportunities now offered to him. “He is enrolled in an IT course and undergoing vocational training to be an electrician”, she adds in a lighter tone. The family also started cultivating rice paddy with the shop’s income.

The bookkeeping training provided by ACTED allows her to keep sound financial records, further increasing her confidence in her shop’s future. However, while her profits allow her to live a comfortable life and support her close family members, she did not stop there – she also makes regular contributions to her church and local school. Her shop has quickly become the place of choice for shopping for other families in the village and its surroundings. She keeps her customers loyal through a credit system, allowing them to pay her later if necessary. And it works: “I have 40 families just to myself here”, she chuckles.