Amana and Muslim Aid funds small entrepreneurs in Colombo

Muslim Aid Sri Lanka Field Office (MASL) and Amana Investments Limited launched their unique microfinance scheme by distributing cheques to 10 small scale entrepreneurs in Colombo last week.

Following the signing of an MoU between the two organisations in April this year, funds totalling Rs 380,000 were handed to 7 women and 3 men micro-entrepreneurs in Kompannyweediya who lack the capital to expand and develop their businesses. Without collateral, banks are unwilling to take the risk on such entrepreneurs.

The beneficiaries received between Rs 10,000 and Rs 60,000 each in the form of specialized Islamic finance facilities without any collateral but supported by peer group cross guarantees and a community based monitoring system. MASL will provide basic training to the beneficiaries including book-keeping, management and marketing.

“I can buy more raw materials with this money without having to pay high interest so I will be able to expand my business and earn higher profits,” said Noorul Rizwan, who sells cloth, makes paper bags and cooks food for sale from her home to support her three school-going children.

In keeping with Islamic law, the beneficiaries will not have to pay interest for their funds. However, a profit-sharing mechanism has been worked out depending on the nature of the business.

“This is the first time Islamic microfinance has been distributed in an organised way in Sri Lanka. We want to see it replicated in other countries. We hope that with this money, you will be able to improve your lives.” MASL Country Director Amjad Mohamed Saleem told the beneficiaries.

Amana Investments Managing Director Faizal Salieh stressed that the scheme was open to all communities irrespective of ethnicity or creed. He also reminded the recipients that the funds were effectively loans that had to be repaid, not grants. “Microfinance is a cycle, a river that never ends. When you repay us, we can pass the money on to many more people and even back to you,” he explained. “What matters most to us is the number of beneficiaries whose hearts and minds we can touch and whose entrepreneurships we can enable through this scheme and not so much the amount of finance disbursed,” he said.

Beneficiaries were chosen for their entrepreneurial skills, with recommendations from the various network partners including the Kompannyweediya Mosque Federation and the Sri Lanka Malay Association.