BIS Review 22/2008  7  about 67% had crossed the poverty line with the support given by the project (2005, p 34). The survey attributes the higher incidence of poverty to the higher income level needed to be above poverty level due to the higher inflation during 1997-2005, a fact which confirms that inflation harms the poor more harshly than the rich. •  11% of beneficiaries had acquired land after joining the project (1997). The total land ownership had increased to 91% by 2005. 44% of land acquisition in 2005 had been for residential purposes and 16% for both residential and commercial purposes, indicating that the beneficiaries had moved to land owning status with the support of the project. •  The asset build-up among beneficiaries, an indicator of economic well-being of the poor, has accelerated since they had joined the project. The types of assets include agricultural and non-agricultural implements, draft and livestock animals, household consumer durables and jewellery. According to Survey 1997, 20% of the beneficiaries had acquired agricultural and non-agricultural implements, 27% draft and livestock animals and 72% consumer durables and jewellery since joining the project. By 2005, the proportion of beneficiaries owning agriculture and nonagricultural implements increased marginally to around 22%, but the acquisition of consumer durables went up significantly to a fraction between 80 – 100%. This confirms the general tendency that, with income increases, there is a greater preference for consumption type durables than for investment type durables.

So, clusters numbering about 8 to 10 groups were set up by making informal arrangements for them to work together. Separate cluster rules were prepared and the members were trained in keeping cluster accounts and records. This process went on continuously for about 12 to 18 months from the beginning of1999. When the newly formed clusters showed sufficient maturity of being able to operate independently, the next move for the project was planned by the project. In the second stage, it was necessary to give legal status to the clusters. Many options like registering them under the law relating to cooperatives or under the Companies Act were considered, but finally, decision was made to incorporate the clusters under the Societies Ordinance as limited liability societies under the name “Isuru Development Society Ltd”, for the simplicity it provided to the beneficiaries. The societies were registered with the Registrar of Companies in terms of the Ordinance. The societies so registered had the objective of realising a common goal of attaining economic well-being of the members with a mutual  8  BIS Review 22/2008  support. The incorporation of societies as limited liability societies was completed within two years by 2001. The next phase was to further consolidate the limited liability societies into still larger economic organisations. Such a consolidation was essential in order to permit this larger organisation to effectively function as a strong economic entity. This goal was attained by consolidating the common efforts of societies in a particular district into a district-wide limited liability company.