Vedda community struggle against microfinance loan exploitation

• They are not literate in reading or writing in Sinhala, the language of the loan agreements

Leader of the indigenous or Vedda community of Uruwarige  Wannila Aththo said people of his community living in villages such as  Dambana and Hennanigala are caught in a vicious circle of microfinance  loans eventually leading to be stripped of only available valuables.   

The Centre for Policy Alternatives (CPA), a  non-governmental organization that advocates power-sharing and good  governance, has now brought to light the concerns of the Vedda  community. 

 
According to video footage released to the press by the  CPA, the Vedda leader said people are gullible to accept loans because  of hardships and find themselves being unable to repay. He said some  members of his community had even pawned their only available small  holdings for rice cultivation.   

Meanwhile, the CPA said in a statement, “We do not  oppose the provision of microfinance loans and the institutions that  offer them; in fact, we view it as a positive opportunity, especially  for low-income communities. However, it is evident that citizens who  have taken microfinance loans are facing mounting issues related to  informal loan disbursement, recovery, interest rates, and more,  compounded by the unregulated nature of these practices, along with  questionable and illegal conditions. The Indigenous community is  particularly affected due to these situations.  

The indigenous community is characterized by its unique  linguistic identity. Although they communicate using the ‘Vedi  language,’ their written language is Sinhala. Many are not literate in  reading or writing in Sinhala. Similarly, Marine Indigenous groups  living in Vaharai and Muttur use their own distinct Tamil dialect and  are not well-versed in standard Tamil.  

Considering these linguistic barriers, the agreements and  contracts exchanged between these communities and relevant institutions  during microfinance loan transactions are often in languages they do not  understand or comprehend. While a few organizations do issue documents  in both Sinhala and Tamil, these indigenous communities still struggle  to understand the contents. 

As a result, they sign these agreements  without a full understanding of the content and consequently find  themselves entrapped in the legal ramifications.  

 These communities are primarily located in the Uva,  Eastern, and North Central Provinces, residing in places like Dambana,  Rathugala, Pollebedda, Dalukana, Dimbulagala, Vahari, and Muttur. They  have lost their habitats in the forests and have integrated into  mainstream society. 
They are now confronted with various economic,  social, and cultural difficulties and complications,” the statement  said.  
Currently, the regional Vedda Leaders led by Vedda chief  Uruwarige Wannila Aththo, have corresponded with the President, and the  Governor of the Central Bank, highlighting the severe financial debt  problem faced by their community. 

Their primary request is to provide  relief from this debt crisis and to establish a more streamlined system  for loan disbursement and collection.  

We have attached relevant articles along with a video clip  featuring Vedda Chief Uruwarige Wannila Aththo’s position on this issue.  

We kindly request your assistance in sharing this information through  your media institution and promoting a social dialogue aimed at finding  solutions to the microcredit crisis confronting the indigenous community  in our country.