Sri Lankan CU Damage Reports Remain Incomplete

MADISON, Wis.-A month out from the enormous tsunami that struck several Asian countries, damage reports from some areas are still scarce. According to L.B. Dasanayake, general manager for SANASA – the Sri Lankan credit union federation – the extent of the damage in many regions is still not fully understood and reports from regional managers continue to trickle in. A nationwide survey may not be available until early February. SANASA currently has reports of more than 200 credit unions being destroyed and another 500-600 damaged. Dasanayake expects those figures to rise as more information comes in from the remote Eastern region and Northern Tamil-controlled areas. Reconstruction is going to be extremely cumbersome given that few Sri Lankan credit unions are computerized, he said. One bright spot is that some district unions (similar to a corporate credit union), such as Matara District Union, have long required local credit unions to submit summary data monthly. Other credit unions, like Kaburugamawa Epitamulla Godakanola, were completely destroyed and are asking households to bring in their passbooks to reconstruct the information. “But many do not have them because they were washed away,” the credit union’s manager said. Of course, furniture, safes, and cash are other challenges for the credit unions to replace as they recover. So much cash has been lost by coastal credit unions, other financial institutions and individuals that the Central Bank of Sri Lanka has begun printing extra currency to compensate, according to a release from WOCCU. In addition, local government officials and borrowers are asking the credit unions to completely forgive all loans to coastal residents. “There is pressure to write everything off,” Nimal Martinus, regional director at a Norwegian NGO involved in relief efforts in Sri Lanka, said, which would be very burdensome. “All institutions should be trying to restructure loans in response to the needs of their clients, but the loans should not be written off.” -