With the advent of Janasaviya Trust Fund in late 1980s, many NGOs started providing micro finance services to the rural poor. Many of these players provided micro finance with other capacity building initiatives such as Business Development, Health & Sanitation etc., which were aimed at enhancing the living standards of the poor.
However, the first decade of this century saw many commercialized microfinance providers venturing in to microfinance with the massive funds they have accumulated. The commercialization of microfinance has created many issues in the marketplace such as over indebtedness and erosion of the credit culture of the country.
When the concept of Sejaya Micro Credit was born in 2014 November, the microfinance in Sri Lanka was dominated by the commercialized microfinance providers. The founders of Sejaya, had other ideas about microfinance. Having worked with rural women for over a decade, the founders have a dream to create an organization that would live up to the true spirit of classical microfinance which is entirely a social enterprise focused on the wellbeing of low-income women of the country.
They founded Sejaya with this intention to establish a different brand of microfinance with the ultimate aim of alleviating poverty. Sejaya’s goal is to create social capital, enhance living standards and reduce poverty of low-income households by providing inclusive financial services coupled with social responsibility. It envisages a Win-Win-Win situation for the Clients, Staff & the Investors.
Introduction
Sejaya Micro Credit Limited was incorporated in 2015 under the Companies Act No 7 of 2007 as a limited liability company for the purpose of promoting the wellbeing of the communities in which it operates. It is a Licensed Microfinance Company under the Central Bank of Sri Lanka. Sejaya aims to create social capital to enhance the living standards and reduce poverty of
low-income households by providing inclusive financial services in a socially responsible manner. Sejaya means “Win for All” as it strives to create a Win-Win situation for its Clients, Staff and Investors.
Vision and Mission
Vision of the Organization: “To be the best microfinance service provider in terms of poverty reduction, job creation & social upliftment.”
Mission of the Organization” “To provide inclusive financial services to needy & unprivileged to uplift their economic situation, empower & generate employment opportunities in a socially responsible manner.”
Values
– Transparency
– Honesty
– Respect to Clients
– Responsiveness to Client Needs
– Employee Satisfaction
Ownership
Sejaya is a fully owned subsidiary of Gojo & Company, based in Japan, and operates directly under the guidance and supervision of Gojo & Company. More information about Gojo & Company can be found on their official website: Gojo & Company https://gojo.co/. As part of Gojo’s commitment to responsible and sustainable business practices, every partner company, including Sejaya, is required to align with the Client Protection Standards and actively work towards obtaining Client Protection Certifications.
Registration and License
Sejaya Microcredit is a Central Bank registered Microfinance entity which was registered in 2020, empowered to carry out microfinance components such as Lending, Savings, etc. In Sri Lanka there are only four MFIs that are registered under CBSL and SMCL is one among them.
Compliance and Regulation
SMCL’s all operations, including the opening of branches, relocation, hiring services, appointment of board members, and the appointment of the CEO, are subject to regulation and oversight by the Central Bank of Sri Lanka. Further SMCL also carry out compliance reporting to the CBSL as per the Microfinance Act No. 6 of 2016 and Central Bank Guideline for Microfinance Institution.
Further SMCL adheres to the Interest rate ceiling, data protection and Client protection guideline issues by the CBSL all times. This ensures that the Central Bank is continuously informed about the company’s financial health and operational progress.
Governance
SMCL is a fully owned subsidy of Gojo& Company Inc. (based in Japan), the overall operation is monitored and supervised by the Gojo Management team.
Board
Further the parent company SMCL has a Board of directors (those who are appointed with the approval for CBSL) will provide oversight and strategic direction. The SMCL board comprised of members who are expertise in Microfinance operations, Investment, Risk etc and these board members independent non-executive directors representing local and overseas.
Sub Committee
Following are the sub committees that are being operated under board:
- Audit and Risk Committee – Committee to discuss and direct SMCL in terms of audit and risk aspect.
- Social Performance Committee – Committee to discuss and direct SMCL in terms of client principle and social aspect, which is chair by the Chair of the board.
Risk and Audit
SMCL has solid risk defense lines as follows:
- First Defense Line : Operations Guideline, Policies, procedures, Front line staff
- Second Defense Line : Risk and Compliance Unit, RALCO, Risk Committee
- Third Defense Line : Audit
Following is the audit that are being conducted in SMCL
- Regulatory Audit by Central Bank of SL
- Statutory Audit by External Audit Firms
- Regular Audit by Internal Audit Department
- Parent Company Audit by Gojo & company in Japan
- Social Audit by SPI5 international Audit
- Client Protection audit by CPP international Audit
Social Performance
Social performance of an organization is to translate its mission in to practice. In SMCL all operations are conducted in strict adherence to the Universal Standards for Social and Environmental Performance Management (USSEPM).
These standards are designed to place clients and environmental considerations at the heart of all strategic and operational decisions, the Universal Standards offer a detailed framework for financial service providers to integrate responsible business practices into their policies and procedures to Microfinance entities.
The implementation of these standards is rigorously assessed through the SPI5 audit, conducted by professionally qualified auditors from the CERISE + SPTF professional network. This audit ensures that Sejaya’s operations are continuously aligned with the highest standards of social and environmental responsibility.
These standards are set by CERISE + Social Performance Task Force and SMCL implemented these standards to ensure sustainability of the organization as well as ensure client who receive service from SMCL are protected.
These standards accessible through the “Universal Standards for Social and Environmental Performance Management” (https://cerise-sptf.org/universal-standards/) serve as a comprehensive guide to best practices within the microfinance sector.
Client Protection
Sejaya committed to adhere to the Client Protection Principles, ensuring that all operations are designed to protect clients and avoid any harm. These client protection practices are crucial not only to safeguard the well-being of clients but also to transparently communicate progress to investors.
The Client Protection Pathway provides a structured roadmap for financial service providers to implement the Client Protection Standards effectively, helping them remain aligned with these critical guidelines (Client Protection Standards). As part of its commitment to these principles, Sejaya has achieved significant recognition for its efforts.
In October 20th , 2023, Sejaya was awarded the Silver Certificate for Client Protection, having secured an impressive 92.9% score. This achievement underscores Sejaya’s dedication to maintaining high standards of client care and ensuring that its operations are consistently aligned with industry best practices in client protection.
Following are the standards that SMCL adheres in order to ensure strict compliance with Client Protection principles:
- Appropriate Product Design and Delivery
- Prevention of Over-Indebtedness
- Maintain Higher level Transparency
- Responsible Pricing
- Fair and Respectful Treatment of clients
- Privacy of Client Data
- Mechanisms for Complaint Resolution
Operations
SMCL operates in 24 districts and all nine provinces through 51 branch networks, currently reached over 95,000 clients with the worth of LKR 4 billion (USD 13,000). SMCL has staff strength of over 400 to support the growth and organization’s goals and targets.
Mode of Operations
Lending Methods: SMCL follows both lending methods such as Individual and Group.
Solidarity Group Method
SMCL follows the solidarity group lending method, where the members are self-selected and agreed to guarantee each other in the group.
Individual Method
Those who are unable to take part in the group method of lending can be obtain services being individual members.
Products and features
Loans are granted for the following purpose;
- Business
- Agriculture and Livestock
- Agriculture Related business
- Services
- Manufacturing
- Emergency
- Pawning – In progress
- Gold Loan – In Progress
- Asset Building – In progress
- Education
- Housing Improvement
- Savings
Loan Disbursement and Collection
Loans are disbursed to clients’ bank account numbers in the intention to inculcate client a habit of formal financial transactions and collection are carried out by visiting the groups / centers or on an individual basis.
Digital Finance
SMCL is the first Microfinance institution to provide digitally enabled lending option to rural clients. Where clients install SMCL mobile app and apply for a small and short-term loans for emergency purposes.
Funding
SMCL receives funds from Gojo the parent company as well as maintain relationship with local and overseas lenders to fund the cash book. SMCL seek CBSL’s approval and clearance to seek funds from overseas lenders
Partners for Synergy
- JICA
- Women in Need (In progress)
- UNFPA
- Silatech
- Gojo
Special Project and CSR
Pasio Project
Sejaya Micro Credit, in partnership with Silatech (a Qatar-based organization), has launched a specialized program to support young entrepreneurs aged 18 to 35. This initiative is designed to enhance income generation and financial inclusion through the following key features:
Eligibility: Loan facilities are available to young entrepreneurs (18-35 years old) to help them grow their businesses and improve their income.
Digital Loan Facility: A fully digitalized lending platform provides seamless access to financial support. Initially, Sejaya is offering small loans of Rs. 10,000 through its mobile app, with amounts increasing in subsequent cycles depending on the requirement.
Loan Management Service: Clients can easily track and manage their loans through a user-friendly platform, ensuring transparency, convenience, and 24/7 customer support.
Community Engagement: A dedicated WhatsApp group fosters knowledge sharing, awareness, and opportunity to expand business and develop, identify market opportunity for raw material and sales, helping clients gain confidence in using digital tools.
Business Profile Enhancement: Entrepreneurs receive assistance in building their digital footprint, including creating online storefronts to showcase and sell their products.
Awareness Programs & Events: Regular workshops and events are conducted to educate and empower young business owners.
This program aims to provide financial access while equipping young entrepreneurs with the digital tools and resources needed for sustainable growth.