Credit unions seeking to rebuild after the tsunami here are now beginning to "comprehend the difficulty of the task ahead of them," according to the World Council of Credit Unions (WOCCU).
L.B. Dasanayake, general manager for SANASA, the Sri Lankan credit union federation, said the extent of the damage in many regions is still not fully understood. Reports from regional managers continue to trickle in, says Dasanayake, who expects a nationwide survey to be completed by early February.
Currently, SANASA knows of over 200 credit unions that have been destroyed and another 500-600 damaged, a number that Dasanayake expects to rise as more information arrives from the remote Eastern region and Northern Tamil-controlled areas.
One big problem: few of the country's credit unions are computerized, making reconstruction an extremely difficult process. For instance, the Kaburugamawa Epitamulla Godakanola credit union building was completely destroyed by the tsunami, leaving little more than a pile of rubble on the beach. "We are asking families to bring in their passbooks, to attempt to rebuild our records," says the credit union's manager. "But many do not have them because they were washed away."
The manager believes that a partial record can be created from their 2004 audit report, but says that it may take months to accomplish this.
The loss of furniture, safes and cash is another challenge for credit unions attempting to rebuild after the tsunami. For many, their entire store of cash has been swept into the sea.
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 additional currency to compensate.
WOCCU said the "greatest risk to fragile credit unions, however, may not be from the physical damage they have sustained. Already, 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," says Nimal Martinus, regional director at a Norwegian NGO involved in relief efforts in Sri Lanka. This, says Martinus, would be extremely challenging to SANASA and other lenders in the area. "All institutions should be trying to restructure loans in response to the needs of their clients, but the loans should not be written off."
Anyone wishing to support the Tsunami Disaster Relief Fund can make a contribution to Worldwide Credit Union Foundation via www.woccu.org/disaster-relief, or via the National Credut Union Foundation's website at www.ncuf.coop.
