Saturday, February 1, 2014

Vanni Aid Foundation

, 01 February 2014

Is this program the same as micro-finance?

No. THE GANESHA PROGRAM loans are interest-free. The repayment period is 30 months and there is no cross-guarantee amongst the villagers. Loans are administered by commercial banks and require a business plan. Repaid loans are reinvested into the same village. Traditional micro-finance loans have a 6-month repayment term with interest rates between 20 – 50%. Typically, they are funded outside of the banking system and do not require a business plan, leaving loan recipients dependent, beholden and vulnerable to failure. GANESHA is dedicated to the implementation of successful, self-sustaining practices.

Why is the program not charging any interest on the loans?

Based on an analysis of the borrowers’ earning potential, we do not believe they can succeed if interest is charged. These villagers need this additional encouragement and support to help them bear the burden of their current situation and establish a sustainable existence. Bank interest charges are borne by the donated funds.

How much of the donation money reaches recipients?

The Ganesha program commits 87.5% of all donations directly to the villagers in form of loans. Any amount in excess of 12.5% spent on bank interest and administration will be borne by the program founder.

What happens to loan repayment proceeds?

All loan repayments will be reinvested back into the given village for further economic development of the community, such as improved housing, school transportation, increased loans to expand businesses and the development of small industries and endeavors that will provide employment. Repaid loans will also present an opportunity to introduce ecologically responsible and economically sustainable practices, such as solar power.

Is this a permanent program?

No. This program is specifically geared to help innocent people who became the collateral damage of the civil war in Sri Lanka. Ganesha’s mission is to ensure that they reestablish their livelihood. Our plan is to continue to help until villages demonstrate a sustainable livelihood. We believe that our work can be accomplished within 5 years.

What role does the Sri Lankan Army play in the administration of this program?

Most of the conflict areas remain under army control. Land mines have not yet been cleared throughout. The army is on an “observe and help” mode and will likely maintain a long-term presence. They are the de facto authority while the civil service structure is reestablished. The army currently handles transportation and provides Ganesha members with an escort. They also supply manpower and support to the villages in the rebuilding effort. They often help to construct schools and wells, prepare irrigation tanks, provide emergency transport, solicit donations for building materials and tutor school children.

What will happen if the loans are not repaid?

We are assuming there will be loan losses. We currently estimate them at 20%. Given the recent floods in Sri Lanka, there could be more. We will redeploy repaid funds to help participating villages with their other goals. The less a village pays back, the less it will benefit from future developmental activity. Lending bank data indicates that, prior to the war, this region had some of the lowest loan losses in the country. We believe this will continue to be true, barring unforeseen events such as the recent flooding.

What is the Sri Lankan government doing to help returning villagers?

The government provided modest resettlement assistance in the form of roofing and siding materials, $50 cash and 6 months of food subsidy. Sri Lanka is focused on rebuilding roads and railways, restoring power and establishing security, schools and medical facilities.

What are the operating/administrative costs?

• Interest on the loans
• Sri Lankan travel by local staff
• Audit expenses and reporting
• Paid ground staff member(s)
• U.S. fund-raising expenses

How can I be kept up-to-date on the program and how donations are helping the villagers?

We will periodically post progress reports on this website: www.GaneshaProgramNamaste.org. We will also call or write to Donor Partners with personal updates, based on their preference.