Capital Reach to diversify into real estate, pawning

Anjana SAMARASINGHE

The formal financial sector in Sri Lanka is stable and it is very well regulated Chairman/Managing Director of Capital Reach Holdings Limited Mayura Fernando said.

"The local financial sector is performing very well and it is a focused segment in the Colombo Stock Exchange too. There is no significant impact from the unstable informal sector", Fernando said.

"As an individual finance company, we have given priority for stability of the company. Financial stability is a vital factor for surviving in the industry.

"We have used several methods for maintaining stability in the industry. We are focusing on our risk management in the areas of credit, interest rats, liquidity. We also adopt good governance strategies for maintain financial stability of the company" he said.

Capital Reach Leasing recorded Rs. 14.18 million profit after tax during the 2007/08 financial year and it was Rs 10.26 million in the previous year. The company recorded Rs 21.8 million profit before tax during the financial year and it was Rs 17.2 million in the previous year.

Managing Director of Capital Reach Leasing Nalin Wijekoon said they are planning to increase the disbursement by Rs 30 million per month from next year. "At present we are maintaining Rs. 70 million disbursement per month. We have recruited more staff achieve this set target. Last year the total disbursement was Rs. 700 million" he said.

The company also plans to diversify into the real estate business during this year. "We are planning to embark on two property development projects during this year. Property development is a lucrative business. Pawning is another potential area for business diversification," he said.

The company will establish pawning centres in Colombo and outstations. "We are confident that we could compete with other players such as banks in the pawning industry. Pawning is popular among customers who have seasonal income and in the pawning business, repayment pattern should match their cash flows," he said.

"Through our leasing and deposit products, we are catering to the SME sector in the rural areas. Nearly 70 per cent of our business comes from out of Colombo. Repayment ratio of this segment is high and they do not have proper documentation for accessing for financing," he said.