25th April 2007

Amana and Muslim Aid team up to help Small Entrepreneurs

Amana Investments Limited and Muslim Aid Sri Lanka (MASL) have formed a partnership to launch an unique microfinance scheme providing capital and training to a disadvantaged community in Colombo.

The pilot project will start in Kompannyweediya making available Rs 1.5 million to more than 20 small entrepreneurs who lack the capital to expand and develop their businesses. Without collateral, most banks are unwilling to take the risk on such entrepreneurs but now through this scheme these entrepreneurs can have access to finance from Amana Investments.

"This is an unique opportunity for a development agency and a financial institution to come together to lift people out of poverty and enable them to be self-reliant," said MASL's Sri Lanka Country Director Amjad Mohamed Saleem.

MASL will provide basic training to beneficiaries including book-keeping, management and marketing.

"Through this scheme we shall provide financial assistance at affordable pricing and enable this class of entrepreneurs to improve their businesses and living standards and become bankable propositions in the future. Our alliance with Muslim Aid will add many non-financial developmental assistance to these entrepreneurs", said Faizal Salieh, Managing Director of Amana Investments. If it is successful, Amana Investments will take the scheme to the rural areas where it operates. This scheme is available to all communities irrespective of ethnicity or religious beliefs.

In keeping with Islamic law, the beneficiaries will not have to pay interest or a service charge for their funds. However, a profit-sharing system will apply depending on the nature of the business. An upper limit of 150,000 rupees has been placed on any individual financing.

Beneficiaries will be chosen for their entrepreneurial skills, with recommendations from religious and reputed social institutions.

Amana is looking at two microfinance products - capital for trading with a six-month payback time and a longer term of two years for entrepreneurs who need funds for buying equipment or machinery.