Avurudu (Sinhala-Tamil New Year) last year was an extremely difficult time for us. I was stuck – business was at a standstill, I couldn’t source raw materials or pay my employees. I borrowed money and managed to give them something for the festival."A.M.S Ranjith from Kurunegala
“Avurudu (Sinhala-Tamil New Year) last year was an extremely difficult time for us. I was stuck – business was at a standstill, I couldn’t source raw materials or pay my employees. I borrowed money and managed to give them something for the festival,” Ranjith recalls.
Setting-up this enterprise was a huge step-up for Ranjith, who initially worked as a lorry driver for the very same factory to which he presently supplies goods. Ranjith’s years of saving and his entire family’s efforts were invested into this business.
The business is a familiar affair for Rose Priynai Fernando from Weerapokuna, Kurunegala, as well. With the first entrepreneurship attempt failing, Rose and her husband were hoping that their luck would change with the new coir-processing venture. Since Rose’s family was already in the business, and they could use those connections, the duo started operations in March last year, filled with optimism. However, the unexpected pandemic and ensuing lockdown threatened to derail their efforts."On any day when the lockdown was lifted briefly, we were here from dawn till midnight. It was the only window we had to get our goods to the factory. So even if it meant sourcing raw coconut husks from a supplier nearby at a higher cost, paying extra for multiple-loads of transport to the factory, or paying employees for overtime, we did whatever necessary to keep the business running” says Rose.
H.D.S Nishantha from Kurunega, also faced similar challenges “My business is located in the backyard of my house, and none of my employees reside near our premises. Four families depend on the salary they get as my employees; they were able to come to work. While I managed to pay them what I could, without daily operations, I didn’t have a steady source of income.”Rajith, Rose and Nishantha are all part of the supplier network of Tropicoir Lanka Pvt Ltd; one of the biggest national exporters of coconut related products.
Without our suppliers, there is absolutely no way for the business to run. In fact, suppliers and buyers are of equal importance to us."Lesley De Silva, Group General Manager, Tropicoir Lanka
For the VCF intervention, through collaboration with the Coconut Substrate Exporters Association of Sri Lanka, ILO partnered with four of Sri Lanka’s largest coir and coconut related product exporters, including Tropicoir Lanka. Through the VCF model, the buyer provided an interest free loan to their MSE supplier. This amount was matched by ILO as a grant to the same supplier to be used for improving Occupational Safety and Health (OSH) and working conditions, machinery acquisition or similar capital investment.
I will be constructing a drying floor using the grant money."Nishantha from Kurunegala
“I will be constructing a drying floor using the grant money,” says Nishantha.
Ranjith is looking at improving the OSH standards in his building in terms adequate cover for the electric supply and switches, and put up a drying floor.
“I will be repairing roof, that’s priority, then I hope to construct a drying floor, I also have plans to get into secondary manufacturing, like fibre,’ says Rose. All three MSEs are now looking at not just business recovery, but also business expansion.
Thus far, the ILO has been engaging with 93 raw husk-processing suppliers, which has resulted in benefits to over 1,000 working people out of which approximately 50% are women. VCF provides an alternative but effective financing model for MSEs, which often remain outside the target of the formal financial sector. Learnings and success stories from this model indicate that it can be adopted and replicated in any sector with strong buyer-seller relationships.