‘Microfinance’ makes exploiting inroads into VEDDAH communities


The women from the Veddah community have become certain microfinance businesses’ latest prey in the midst of the economic crisis that has affected every group in Sri Lanka.

“I only know how to go into the jungle and hunt. Since I was a child, I have been practising for it. We will, however, place our signatures or thumb impressions to receive money from a well-groomed man carrying a brief case and documents and is ever prepared to offer money. It doesn’t matter what is written or stated in the document as long as we are getting money,” lamented Uru Warige Anulavathi, a resident of Henanigala Vedi village, a victim of ‘unethical microfinance’.

Historically, the Veddah community lived in Sri Lanka’s dense forests in small, convivial groups in caves while they foraged, hunted, and fished. The economic crisis has, however, had a telling effect on them as any other group at this point of time.

Despite having a lengthy history and low literacy rates, the Veddah group has also been economically disadvantaged as a result of the insensitive State authorities who forcibly confiscated their agricultural lands for other use while denying them their land for farming.

However, a substantial number of microfinance loans have been obtained by the communities across the country where the Veddah community currently resides in order to make ends meet.

Darkness crept into the indigenous people’s lives in the 1980s as they were forcibly removed from their dwelling properties. Some were even barred from hunting. Due to State instituted rules and decrees forbidding them from entering forests, many traditional and cultural rituals and obligations related to ‘Kingsmen’, hunting and celebrations have been abandoned. As a result, the Veddah community is desperately looking for alternatives to support themselves.

Due to the negligence of those responsible, the microfinance companies appear to be taking undue advantage from people who are affected by poverty. They have made inroads to remote villages in search of new clients with much haste and enthusiasm.

The residents of Henanigala, Ampara-Polle bedda, Galwala Yaya, and Dimbulagala-Dalukana appear to be the victims of these businesses’ debt trap, just as they have rendered the illiterate women in Veddah community easy prey.

Why target them?

Thala Bandarage Chandrani, a 37-year-old woman from Ampara, has borrowed Rs 100,000 from a reputed microfinance organisation in Sri Lanka, so that she can grow peas to make a living. Though the weekly repayment instalment is Rs 2,650 she can only afford Rs 500. However, representatives from the microfinance company confront Chandrani and threaten to take legal action against her, if she does not service the loan as stipulated by them.

Chandrani is also in jeopardy since her husband is often travelling for business or looking for earnings. She claims that because she has not attended school, she is unable to read the letters she receives.

She expressed with sadness over the fact that she had once gone hunting with her husband and was now one of the many ladies in the nation who had been a victim of ‘predatory microfinance’. “I wanted to plant peas so that we could use the harvest at home. But the drought season completely ruined them, putting us in despair and making us depressed,” she said.

Reasons for borrowing

The Veddah community, an indigenous group in Sri Lanka, alleged that because there is no paddy land available for agriculture and the Veddah community is not permitted to enter the protected forests, the community’s members are experiencing tremendous economic hardship.

They argued that if one has the flexibility to enter the forest at least to gather honey and ‘dig yams’ for food, life can be somewhat comfortable. However, the Veddah community had been compelled to leave their usual habitats and search for money for their sustenance.

The community complained that some entities demand monthly payments while others enforce weekly instalments of Rs 30, 000. However, because poverty hangs over their life, these illiterate people become easy prey.

Unethical behaviour of credit officers

Chandrani commented on the need for money, by saying that before receiving the microfinance loan, they enjoyed a peaceful existence. Even though they did not have enough food for three meals a day back then, she remembered how contented they were at the time. However, she claimed that although the microfinance officers initially presented the loan schemes as havens, they are now on par with any ‘devil’ when they come to collect money.

The borrowers have been put under pressure to repay debts by the credit officers who ‘sign’ loan agreements, a service for which they are compensated. In certain instances, the officials actively promote loans or provide their own unsecured loans to settle debt.

Negative consequences of microloans

Anulawathi claimed that although she obtained a loan to pay for nets for her husband’s fishing, she was unable to pay it back due to the costs associated with feeding her family.

She borrowed Rs 50,000 in the first instance and was able to repay it in full. She then enhanced it to a further Rs 100,000 in the second loan-phase but was unable to pay more than Rs 60,000, before the credit officers threatened to sue her.

Anulawathi responded that Henanigala is just another hamlet that has fallen victim to the microfinance trap and when questioned as to why, in her capacity as the village’s leader, she is not doing more to stop this from happening, she had this to say:

“Even the leaders have failed to provide a solution. It comes as a result of the economic hardships brought on by the poverty that surrounds the majority of the human population. Many residents of Henanigala are also victims of the debt cycle,” according to her.

However, speaking on the matter, Dalukana Thalawarige Priyantha, the leader of the Veddah community in Dimbulagala, said, if they enter the forest, they will be detained by wildlife officers.

“About 200 of us are here. Since there is nothing to do, many people work for daily wages, so I will also be working on a building site. I occasionally travel to Colombo to work. Many people travel to the village and take those loans, since they have no other means of support. The Mahaweli authorities would not let us into the forest that we have inhabited from time immemorial. Our folks are unable to go for hunting or yam-cutting in the forest. No land is available for cultivation. No land will be provided to us. While authorities turn a blind eye, other people indulge in deforestation and seize the properties,” he claimed.

Emotional effects

According to Suranga Rupasinghe, the President of the National Cooperation Development Foundation, the Vedda community in this country has also been affected by the ‘epidemic’ of microfinance loans, which has driven them to the brink of extreme poverty. He claims that the underprivileged people of Sri Lanka have become helpless victims of microfinance.

According to him, this is an alarming or rather a ‘hazardous’ situation; if you take a microfinance loan and are unable to make your loan repayments, the loan’s high interest that is being charged will force you to become suicidal.

“One thing I have found is that the lending institutions are keen to disburse a loan, without first determining whether the borrowers have the ability to service it or repay. As a result, numerous impoverished farming and fishing families in our nation’s villages have fallen victim to the debt trap and passed away too soon; in tragic circumstances. It is terrible that the Veddah community’s life is now being shattered. The poor women of villages like Henanigala, Dalukana, and Pol Bedda are trapped in a debt cycle,” he said.

He claimed that taking a sizeable loan with a high interest rate is a risky move, and if that option is taken, the Veddah families in this nation will fall deeper and deeper into abject poverty.

“We are making every effort to avoid this situation. Even now, we are pressurising the Government to act swiftly to restrict these microloans,” he said.

What they want?

The Veddah community is no longer seeking financial assistance. The women in the Veddah community are pleading with the Government to grant them land because they are better skilled in hunting and agriculture. Due to their extensive knowledge, they also request to grant them opportunities to use their skills in the form of employment in the management of livestock.

The Veddah community in Sri Lanka from whom future generations can learn about the ancestral life of our forefathers, who have had a diverse culture and are well-equipped. However, the Veddah community’s women also endure suffering just as much as the cruel social structures and the women in low-income households.

What can the State offer?

The Ministry of Agriculture’s spokesman said because they do not possess any lands that had ‘legally’ belonged to the Veddah community, they are unable to grant any, for cultivation. The official added that they have not had any requests for land from the Veddah group, for farming, but if they do, they will find a way to save the nation’s final indigenous population.

A spokesman for the Ministry of Wildlife Conservation indicated that with an Amendment to the Forest Conservation Ordinance, the Veddah people will have the opportunity to hunt specified species and enter specific woods.

When approached, the Ministry of Land’s Additional Secretary (Land), J. L. C. K. Jayasinghe, highlighted that if the Veddah community requests lands, they would be in a position to provide.

The farmers and Veddah communities, who lost their properties stemming from the Mahaweli Authority projects, are currently being given lands, according to Resident Project Manager at Mahaweli Authority A. L. Osman de Silva. Additionally, he claimed persons who have been cultivating were given two acres of land for cultivation while citizens who lost their homes were given money.

“34 families have received lands, 117 agricultural irrigated lands, and 24 families have been provided with the necessary facilities to construct toilets, while water distribution has been restored for 80 families, and construction of common public wells has also begun,” he said.

Elaborating further, he said, a nursery and a school had been built, as well as necessary facilities have been provided to the children of the indigenous community, and that a building for the Veddahs Cultural Centre had also been built.

“A lecture hall and necessary facilities have been provided for Pollebadda School, and indigenous people have been involved in livestock development programmes; a milk collection centre has been built and necessary equipment provided. Polebadda road development is underway together with construction of a Clinic Centre for clinical care,” he said.

He said dwellers who had lost their homes received about Rs 20 million in 2021. Nine Hundred and Twenty hectares have been divided among 10 individuals, while another seven are awaiting the disbursement of funding under the initiative ‘Yaya 2’ from the government. He added that approval for this is pending.

In light of so-called Development

The expansion of the nation’s open economy has forced the Veddahs, who had once made the forests near Wellassa and Dambhana the core of their habitat and culture, to leave their native territories The repercussions of modern-day development have destroyed their habitat and their way of life, to the extent their sustenance and rebuilding process have become almost impossible.

For long, the enormous impact of changes resulting from deforestation and land grab have been challenging and a dominating factor in their lives.

The microfinance companies that have sprung up like mushrooms during the last decade have had an adverse effect on the peaceful livelihood of the Veddah community and what is expected from the State is to take stock of their dire situation, act swiftly and provide redress for their survival.

(Pix by Lakmal K. Baduge)

By Thameenah Razeek