UMCOR / News Room / News & Features / Archives 2011 / 0701 - In Sri Lanka, Village Livelihood Groups Promote Independence

In Sri Lanka, Village Livelihood Groups Promote Independence

July 1, 2011—Despite the destruction caused by the 2004 Indian Ocean tsunami and years of civil unrest, more than a thousand Sri Lankans currently enrolled in a livelihoods program implemented by the United Methodist Committee on Relief (UMCOR) are building a brighter future for themselves and their families.

Developed in partnership with Lutheran World Relief, the program identifies vulnerable persons in 20 targeted villages in eastern Batticaloa District. It supports them by providing business and leadership training and revolving loans, and by developing self-help groups known as Village Livelihood Groups, or VLGs.

The Sustainable Livelihoods Development (SLD) program also works with community-based organizations to start up medium-size group businesses and develop economically productive infrastructure.

By the end of 2011, a total of 2,050 individuals are expected to participate in the program.

VLGs are composed of approximately 10 individuals from the same village. They meet weekly to support each other and local business and community development. Since the start of the program, 106 VLGs have been formed.

Each individual within the group receives an in-kind loan valued at between $70 and $250. At least 1,000 of the participants will be supported to start small businesses, with a combination of business-skills and vocational training. The training also helps them organize their VLG and to make decisions on new loan requests.

VLG members repay 50 percent of the loans they receive back into the VLG to ensure sustainability, support future development of their businesses, and to avoid exploitation by moneylenders. Loans are repaid within a year after a participant’s business opens.

Those funds support the operation of the VLG, the granting of new loans, and community development projects. VLG members also put some of their earnings into savings on a weekly basis, funds that are then available for education, health, and micro-insurance purposes.

All the loans are small, by US standards. But the difference they make in the program participants’ lives is huge. Here are five short stories compiled by UMCOR Sri Lanka field staff about VLG participants who are sustaining their families and building hope for the future through this program.


Shanker is the father of three children and a participant in the Valai Pu (or Plantain Flower) VLG. He is also the group’s team leader. With his loan of US $228, Shanker bought tools, buckets, tarpaulin, and a wheelbarrow to start a brick-making business.

He now earns $685 a month, from which he pays an employee, purchases more materials, and makes a profit of $183. “I am able to have a steady monthly income,” he says, which surpasses the income he had made from seasonal rice cultivation.


Rathithavi is the group leader of the Kalaimagal VLG, named for a Hindu goddess. She has a space in her sister’s flour mill where she grinds chili using a machine she purchased with an UMCOR loan. Rathithavi, who has been separated from her husband for years, is thus able to support herself and her two school-age children.

Through the Sustainable Livelihoods Development (SLD) program she has learned self-employment skills, basic accounting, and ways to attract customers. “When they come to me in a hurry to grind their ingredients, I don’t send them away,” Rathithavi says. “I fit them into my schedule, and they are happy! While they wait for their product, I chat with them and get to know my customers better.”

Because her business has flourished, Rathithavi was able to repay her loan in under a year.

Tharmarai Pu VLG

The Tharmarai Pu (or Lotus Flower) VLG is one of the most successful groups in the Sustainable Livelihoods Development program. There are 10 members, and they have used the UMCOR training and loans very well to implement their small businesses.

All had been uprooted numerous times during the 20-year conflict in Sri Lanka, which officially ended in 2009. The training they received through the SLD program, they say, has given them confidence both to speak up to local authorities regarding their needs and to fend for themselves in the small businesses they have created.

Seedai, for instance, is a widow and the mother of three girls. She raises cattle for her living. With the loan she obtained from UMCOR, she purchased a cow and a calf. When the cow produced another calf, this again improved her income. She milks the cows each morning and ensures that the milk is delivered right away.

Pathmanathan is a fisherman. His UMCOR loan enabled him to buy new fishing nets and to double his monthly income, as he is better equipped to exercise his profession.

As the program team sees the fruits of the SLD project, they feel motivated to engage in forming new VLGs for the betterment of the community.


Sivanesam, the mother of eight children, has faced one hardship after another. First, the village where she, her husband, and their children resided was ravaged in the violence between government forces and separatist rebels.

For more than a year, the family lived in a government-run internally displaced persons camp. When they finally returned to their village, Sivanesam’s husband left her and the children. Sivanesam has a heart condition and had to rely on close relatives and extended family to meet basic needs.

Then Sivanesam learned that UMCOR was providing loan assistance to persons in her village. She joined the Thalam Pu VLG. With her loan she purchased tools and materials to start a chili powder business. She now sells 10 medium-size packets of chili powder each day and makes a monthly profit of $23.

Sivanesam is proud. “Even in my old age, I am able to support myself with the profit I gain through my chili powder business,” she says. “I am no longer a burden to my family and those around me. I am independent,” a priceless gift.

Your gift to Sri Lanka Relief and Development, UMCOR Advance #3020630 supports efforts like the Sustainable Livelihoods Development program to accompany the people of Sri Lanka as they emerge from devastating loss. Online Giving

*This story was written with reporting from UMCOR Sri Lanka field office staff.