Our History

In 1993, Sewalanka Foundation, our parent organization, began working with Sinhala, Tamil and Muslim communities in conflict-affected areas of the north and east. Sewalanka focuses on helping rural communities identify and address their own development needs through collective action and strong community organizations.

In the early years, Sewalanka was primarily working with communities that had been displaced by war. The resettling communities had a fairly uniform set of priorities: restoring infrastructure (e.g. drinking water wells, irrigation systems and common buildings) and resuming agricultural production, fishing and basic shops and services.

Over the years, the situation in some areas stabilized, and Sewalanka was able to expand its support to isolated rural areas that had not been displaced by war. Community organizations became stronger. These settled communities began raising different kinds of issues and requesting different kinds of services. They spoke of high input costs, low net profits, the exorbitant rates of local moneylenders, local trade monopolies and the unemployment of rural youth.

Sewalanka worked with these communities to establish internal revolving loan funds to meet their own credit needs and tried forming direct links between the community organizations, rural banks, microfinance institutions and traders, but there were many challenges, and it was clear that a more focused intervention was needed.

In 2002, a ceasefire agreement was signed between the Government of Sri Lanka and the Liberation Tigers of Tamil Eelam. This created more space for long-term development initiatives, and Sewalanka began a strategic planning process that resulted in the decision to form two subsidiaries. SEDCO was formed to provide enterprise development services and Sewalanka Community Financial Services (Sewa Finance) was registered as a microfinance institution to provide wholesale financial services to strong community organizations.

In late 2003, SEDCO was formed as a spin-off of Sewalanka's Enterprise Development Unit. By the end of 2004, SEDCO's registration was complete and the company had become self-financing through a combination of microenterprise development training and business counseling.

Then, on December 26th, a tsunami struck the Sri Lankan coastline. Sewalanka mobilized all of its resources for the emergency response and rehabilitation effort. For the next two years, long-term initiatives, including SEDCO, were put on hold, while Sewalanka worked with the government, civil society organizations and international agencies to respond to the natural disaster.

SEDCO was reorganized at the end of 2006 with a focus on direct trade linkages and value chain investments. Sewalanka district offices began to develop pilot initiatives to test different strategies and approaches. We worked with rural producers to:

• Develop collective marketing systems,
• Establish forward contracts,
• Fill an export order for a major international buyer,
• Bypass monopolistic traders to buy inputs and sell products directly,
• Establish and strengthen community enterprises,
• Develop shareholder systems and
• Test strategies for equity investment and venture fund management.

Each initiative has faced unique challenges and there have been many lessons learned.

In 2009, we began reviewing these pilot initiatives, compiling lessons learned and formalizing our business model. SEDCO is now seeking partners and investors to scale up the successes of our value chain investment and direct trade approach.