The much hyped about “trickle down effect” has not happened and infact, the gulf has widened making the poorer sections of the country’s population worse off.  This discrepancy and the continued neglect of this sector can have dire results and is unsustainable in a healthy democratic system.  Thus Leon Trotsky in his book “Revolution Betrayed” referring to the down trodden and those economically dispossessed says, “their strength lies not in their capacity to kill but in their great readiness to die”.

 Mahinda Chinthanaya under the heading “A flourishing society – sustainable development” says “A National Economic Policy will be formulated by integrating the positive attributes of free market economy with domestic aspirations, in order to ensure a modern and balanced approach, where domestic enterprises can be supported, while encouraging foreign investments”. 

 “ A programme will be launched to provide capital, technology and knowledge required by the local entrepreneurs to penetrate into International market”.

 How is this going to be achieved? Mahinda Chinthanaya says “A new banking scheme named “Lankaputhra” will be introduced.  Financing facilities will be made available to local small & medium entrepreneurs to become internationally competitive through this new window of finance.”

 Thus the recognition of the inadequate development banking facilities for many sectors and also this factor as having constrained the development of the rural economy in Sri Lanka.  It is in this context the unwise decision of privatizing the two Development Banks which has left a large vacuum in the achievement of national development priorities has to be viewed.  For it is only a DFI of necessity that cannot forget the basic tasks of poverty alleviation, income distribution, take up long gestation high risk projects etc.  which form part of the development tasks.

 It is in this background and in order to facilitate the provision of financial support to the hitherto neglected sectors of the rural economy and to bring them into the mainstream of the development process that the fully Government owned Lankaputhra Development Bank was established.  In order to achieve these objectives Lankaputhra Development Bank adopts a strategy of channeling development finance to the small and rural sector direct rather than being a refinancier.   In order to accelerate the process of credit delivery to the priority target areas, where it is most needed direct participation would be the strategy of the Bank.  In addition, the Bank would also play a necessary catalyst role in generating economic activity in the hitherto undeveloped regions and achieving regional development.

 However for an effective involvement in this sector presence of the Bank at the grass root level is a vital necessity.  Through this presence in the regions the Bank will be able to seek, promote and assist the utilization of local resources, promote exportable surpluses, promote employment and be instrumental in income re-distribution in the regions.  In this endeavour, the Bank would harness one of the main strategies of the rural poor, their solidarity, the ability and readiness to place the good of the group beyond self-interest.

 We were able to perform the responsibilities of the Bank within the nine months of the Banks operations efficiently and at a profit.  As we enter 2007 we will continue to extend our services in the regions through a broadening branch network and reaching hitherto untapped areas.

 The success of any organization is dependent on it’s people and I must record my appreciation of the contribution made by Mr. M P T Cooray the first, Chief Executive Officer of the Bank, who has hitherto resigned, in establishing the Lankaputhra Development Bank and bringing it to it’s present status and also the management team and the staff whose dedication and hard work continues to be a main source of strength to the Bank.  I must also record with a deep sense of gratitude, my appreciation of the active role played by my colleagues on the Board in guiding the Bank to success.