Hatton National Bank PLC (HNB) launched a Rs. 20 m grant fund to support 200 hard-hit microfinance customers who have been affected by the ongoing pandemic.
Speaking to The Morning Business, HNB PLC Chief Transformation Officer Chiranthi Cooray yesterday (19) clarified that this is not a loan but a grant.
Cooray stated: “We (HNB) realised that the microfinance customers, being at the bottom of the pyramid (BOP), are distressed. We wanted to contribute to them beyond the call of business.” Cooray further emphasised that HNB acknowledged the need of the hour is to help their customers by becoming the customers’ “Partner in Progress”.
In economics, the BOP is referred to as the poorest two-thirds of the economic pyramid. On a broader scale, the BOP refers to a market-based model of economic development.
The United Nations (UN) Millennium Development Goals has approached the BOP as an economic opportunity for multinational corporations (MNCs) unlike the typical aid-based models of economic development in alleviating poverty.
Thus, HNB initiated their contribution as a financial services provider, Cooray added, elaborating that this is a total production of a programme since the grant is a completely different task from what a bank would typically do.
However, the bank designed a criteria to select who are eligible to receive this grant in order to avoid any misunderstanding or confusion amongst customers, Cooray said. The framework for selection was strict to accommodate microfinance customers across the island.
Thus, according to Cooray, microfinance customers from the agriculture, construction, dairy and poultry, fisheries, food processing, furniture and other manufacturing, garment manufacturing, groceries, handicraft, retail and trading, as well as services sectors were selected through the bank itself since HNB PLC has a microfinance customer base, and the recommendations of the offices and branches finalised the selection process of the eligible individuals.
The fund has been established by the Sustainability Foundation of HNB PLC. The grant was given in two phases to upscale businesses. Accordingly, 117 customers were shortlisted for the Rs. 50,000 in the first phase and the second phase granted another Rs. 50,000, which was only to be provided if the customers had made use of the provided money, verified by a field visit while taking precautions due to Covid-19, Cooray clarified.
As such, out of 117 customers, only 112 customers were eligible for the second phase of the grant.
This initiative was solely taken to encourage microfinance customers to invest in their businesses and to be self-sufficient, and ultimately, it will support the nation.