In 1977 it was decided that the Mahaweli Development programme would be accelerated in order to tackle three serious problems that the country was facing, namely, shortages of jobs, food imports and hydro-energy. This paper discusses the problems associated with the disbursement or credit in the Mahaweli areas. The functioning of cultivation loans is inherently problematic because of the lack of coverage of Mahaweli farmers and the low benefits made available to farmers under the agricultural insurance. Panditharatna discusses the various issues associates with this scheme and offers solutions on how to improve on and overcome the problems at hands.