Fueling Dairy Growth in Sri Lanka With Tailored Financial Products
Exclusive Loyalty Program Rewards Small-Scale Dairy Farmers
Eight dairy farmers trained by IESC are the first recipients of the exclusive loyalty card for dairy entrepreneurs. Photo credit: DFCC Bank.
Since 2018, IESC has been empowering Sri Lanka’s small-scale dairy farmers through the Market-Oriented Dairy Project (MOD). With funding from the United States Department of Agriculture’s Food for Progress program, IESC has provided training and mentoring to enhance the technical knowledge of dairy farmers and facilitated low-cost financing solutions to support their businesses.
In collaboration with DFCC Bank, a prominent development bank in Sri Lanka, IESC developed a value chain financing model linked to farm productivity indicators, one of many low-cost financing solutions created to drive growth. More than 2,500 dairy farmers have benefited from this financing scheme, totaling to a loan value of LKR 300 million for dairy (US $1 million), while the bank’s non-performing loan rate remained impressively low at under 2%, significantly below the average rate of over 5% during the same period.
Mr. Kusal Weerasooriya, IESC’s youth entrepreneur for MOD, expressed his appreciation for the recognition and honor of being included in the DFCC loyalty program. Photo credit: DFCC Bank.
Recognizing the potential of the model to significantly boost industry growth, IESC also worked with DFCC Bank to develop the Kiri Vyavasabhiman Dairy Entrepreneur Loyalty Program. This sustainable and scalable approach to agricultural financing rewards and supports progressive dairy farmers. With an initial allocation of LKR 500 million (US $1.7 million), this program offers preferential loan rates, along with a range of business-friendly banking facilities such as leasing, pawning, free digital banking services, and rebates on processing fees. The program also provides bank-funded junior accounts and discounts on essentials like machinery, equipment, feed, seeds, medicine, and testing.
Chandana Wanigasena, vice president of micro, small, and medium enterprises at DFCC Bank, remarked, “DFCC Bank’s allocation of this substantial fund underscores our unwavering commitment to the dairy sector. By supporting MOD’s concept of the Dairy Entrepreneur Loyalty Program and leveraging its proven model of cultivating dairy entrepreneurs producing 100 liters daily, along with its climate-smart dairy farm model, we are taking concrete steps to enhance the financial sustainability and growth prospects of smallholder dairy farmers.”
As IESC wraps up the seven-year Market-Oriented Dairy Project, the loyalty program will continue to support emerging, business-oriented dairy farmers in making informed investments and ensuring sustainable growth, while enabling the bank to lend with confidence.
The Market-Oriented Dairy Project, based in Sri Lanka, is funded by the United States Department of Agriculture (USDA) Food for Progress initiative and implemented by IESC. The program aims to double the milk production of participating dairy farmers and enable them to obtain a higher price premium for fresh milk through interventions primarily designed to enhance their technical knowledge and create an entrepreneurial, business-oriented mindset. The program also supports enterprises along the dairy value chain to meet the demands of the country’s dairy sector to catalyze sustainable growth.
