According to the report during the last five years, poverty has declined rapidly. For example, the poorest Southern Province has cut poverty in half, from 28% in 2002 to 14% in 2006/7. However, significant challenges loom large, not least addressing reconstruction in the North and East of the country.

The World Bank said the Government's Gemi Diriya program (the strength of the villages), seeks to achieve its targets by focusing not only on community infrastructure but also on social services, skills development, access to micro-finance for small businesses and micro-enterprises, and partnerships with the private sector.

“Gemi Diriya is about enhancing people’s livelihoods and ensuring a better quality of life,” said World Bank project leader Meena Munshi.

Since its inception in 2004, Gemi Diriya has touched the lives of close to 900,000 poor Sri Lankans in over 1,000 villages in Uva, Southern, and Sabaragamuwa Provinces.

The program has financed 2,140 community infrastructure subprojects, generated about 18,500 jobs, and provided support for livelihood activities to 140,000 households. Before the project, about 70 percent of households in the project villages had no access to credit and marketing facilities. Now, almost 20,000 self-organized savings and production groups are actively mobilizing savings. Savings groups have used their cumulative savings of $5.25 million to leverage credit equal to about ten times that amount, and have invested $17.6 million in more than 125 types of income generating activities, The World Bank’s review said.

“An independent evaluation showed that 90% of community members reported feeling empowered and having a sense of ownership over the project,” Munshi said. “About 98% repay loans with their savings and make new investments. And about 50% of households indicated an improvement in their economic and living conditions, all exceeding targets.”

Focus on Women and Youth

Gemi Diriya gives priority to youth, women, and the most vulnerable groups in its decision-making. Youth and women now comprise 66% of decision-making positions at the village level. In addition, the community-owned and savings-led microfinance system allows them to generate and accumulate resources that are used to leverage additional funds from other government agencies, banks, and the private sector, the report said.

Gemi Diriya is also expanding its reach to two more provinces (North Central and Central). By 2016, the program is expected to benefit 7 million persons in 5,000 villages, The World Bank said.