Sri Lanka Revolving Funds: Building community resilience

Life for local communities in Nilgala is highly dependent on nature. Rain is their god. They live with wild animals and elephants. Road access is not good. There are no bridges across the streams. But their simple life is moving. Without the sympathy of the deities and spirits living in the Nilgala forest, their life is not easy. Without rain they face extreme poverty.

Nilgala Forest and the adjoining Gal Oya National Park are protected forests. But Aralu, Bulu, Nelli, the medicinal plants abundant in these medicinal forests are a source of income during the season. At other times they grow paddy, maize, banana and other crops.  This seasonal income is not adequate for over 500 families who live in just 10 villages located adjoining the Nilgala Forest. They have restricted access to the forest because it is protected.
Conservation and community forest governance is a must. Local communities want to manage the forest as a source of livelihood. Their beliefs enshrine a need to protect the forest, for that is where the souls of their ancestors go in the afterlife.

Yet income in the Nilgala communities is uncertain. Half of the year they have to borrow money for health emergencies, cultivation and house construction from moneylenders at high interest rates. Even the microcredit programmes have prohibitively high interest rates.

Thus the concept of a revolving fund was born to assist communities in troubled times and with the aim of mobilizing the Nilgala communities for better forest governance. CEJ/FoE Sri Lanka created this revolving fund with the financial support of the International Union for the Conservation of Nature Sri Lanka. Nilgala Protection committees were created in 10 villages in the area with more than 500 beneficiary families who received 800,000 Sri Lankan Rupees (US$5,500).

Now local people can borrow at a 1% interest rate. The total fund remains in the village under collective control. The money helps the communities to improve local income assisting in hard times and has improved forest management. The total fund has now grown to almost double the original. Villagers are now less dependent on the money markets, especially the black market moneylenders.

Economic transformation of the less privileged communities and alternative financial  models like the revolving funds make people’s lives better while supporting the environment. This revolving fund is an alternative model which can be replicated in other communities who are willing to transform their lives and be less dependent on the corporate economy.