Portfolio Spotlight: Vision Fund Lanka in Sri Lanka

vflanka_logo Sri Lanka, an island nation south of India, is home to over 20 million people. Despite its abundance of natural resources, the country still bears the scars left by a 26-year civil war that ended in 2009 and the Asian tsunami in 2004. Both of these historic events have left devastating effects on millions of lives. Although signs of development can be seen in urban areas, poverty is still prevalent in many rural regions of Sri Lanka. Vision Fund Lanka (VF Lanka), established in 2004 as a microfinance branch of World Vision Sri Lanka, works to counteract the cycle of poverty established by the country’s recent history. MCE’s partnership with VF Lanka will help the company accomplish this goal and increase its impact throughout the country.

VF Lanka focuses primarily on providing microfinance loans to people living in rural areas, especially women, through a group lending methodology. Given its affiliation with World Vision, which has operated in Sri Lanka since 1977, the institution has a stronger social focus than most MFIs in the country. This social focus is apparent through their efforts to educate their clients and provide a better future for women and children. Almost all of VF Lanka’s clients are women, borrowing very small amounts (an average of US$245), predominantly for subsistence agriculture and commerce activities. The institution requires its clients to attend monthly group meetings, in which they receive basic education on business management, financial literacy, and how to handle problems specific to their operations. In order to measure its social impact, VF Lanka uses the Progress out of Poverty Index (PPI). VF Lanka’s strong social approach is further evident in its low client attrition rate (15% per year) and its low employee turnover (6% per year).

Gayashya, a war widow, mother of five, and serial entrepreneur, has been a client of VF Lanka for the past four years. With the proceeds of her current loan, she purchased a piglet, which she raised (see picture below) and then sold to a butcher. Additionally, she breeds chickens, which she sells in the nearby market. She also runs a small corner store out of her home. Described as honest and hardworking, Gayashya is well respected in her community and has undoubtedly benefited from her relationship with VF Lanka.


Since its conversion to an LLC in 2012, the institution has made it a priority to strengthen management capabilities, reduce operating costs, improve efficiency, and source funding at market rates. Today, VF Lanka finds itself at the beginning of a growth phase, and represents a good opportunity for MCE to continue to strengthen its contributions to the microfinance industry in Sri Lanka.

(Images courtesy of Vision Fund Lanka.)

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