PLC Islamic Financial Services Unit a success

Islamic Financial Services Unit enjoyed an excellent growth rate in its operations and customer base over the past three years. Of the Sharia complaint product range, the Ijarah or Islamic leasing achieved an outstanding record of success.

The Ijarah facility is based on the principle of the financial institute purchasing an asset for its customer and leasing it to him over a specified period of time with the promise that at the end of the period, the institution will either sell or gift the good to the customer.

Ijarah revenue stood at Rs. 105.5 million last March with a Gross Receivable Portfolio exceeding Rs. 902 million that covers over 370 active vehicle contracts, making PLC the market leader in Islamic leasing.

Islamic Financial Services Unit (IFSU) of People's Leasing Company (PLC) was established in October 2005 and commenced operations in January 2006, as a window office of its large and well established holding company PLC.

Today, the unit claims unrivalled success as a customer driven entity which provides innovative Islamic financial solutions that are in compliance with the Islamic doctrine, also known as Shari'ah rulings on finance, investment and trading.

PLC-IFSU also initiated Mudharaba investments whereby the investor provides capital to the entrepreneur (IFSU) in order to undertake business under the principle of profit sharing on a pre-agreed basis.

Other Sharia compliant facilities include Murahaba or cost plus financing and Bai Bithaman or deferred payment sale. Pipelined products designed to cater the rural sector, including microfinance facilities are currently being developed by the Shari'ah Supervisory Board of PLC, which consists of the islands leading Islamic scholars.

The Sri Lankan market for Shari'ah compliant instruments remain attractive among both the Muslim community, who are at the fore of many business activities.

With the anticipated regulatory changes expected to take place in the near future, Sri Lanka is well placed to tap the surplus oil revenues from the Middle East under Islamic financial facilities. This industry continues to enjoy unprecedented growth in most part so the globe that has rapidly accelerated since the turn of the new millennium.