LakJaya empowering marginalised groups

Lumbini Edirisinghe

LakJaya Micro Finance Limited is among the six largest providers of micro finance in the country and is looking at increasing their asset base.

LakJaya already has an asset base of Rs 534 million, which includes a loan portfolio of over Rs 400 million. “LakJaya caters to 38,000 plus borrowers, in 10 districts through our 46 ranch offices employing 290 full time staff,” said Founder and Executive Chairman, Lasantha Mendis.

LakJaya does not accept savings from the public. “We are a Micro Finance company where credit is granted to marginalised groups who cannot access credit from formal financial institutions. Finance companies on the other hand mobilise public deposits,” he said.

Mendis first visited Grameen Bank of Bangladesh and studied the organisation and received assistance and management advice from senior officials of Grameen Bank to launch LakJaya Micro Finance.

The Founder of Grameen Bank, who is the 2007 Nobel Peace laureate Professor Muhammed Yunus, was among those he met with. On his return after the exposure visit to Grameen Bank, Lasantha, with the assistance of a former bank colleague, prepared a concept paper and distributed literally hundreds of copies among potential investors.

In 2005 LakJaya transformed its lending methodology from a group methodology to an individual methodology replicating ASA, Bangladesh, which is one of the largest and efficient micro finance providers in the world.

Lending operations of the company commenced from Sekerapura, Rajagiriya a low-income locality. The initial clientele was about 15 poor women from the area who were divided. This was typical of the Grameen lending model.

Later that year lending operations commenced in other areas such as Thalduwa, which is a village adjacent to Awissawella and also Dikkumbura, which is a little village in Galle.

Through the success of these operations, it was proved that the lending model of LakJaya could be replicated.

Observing that the estate workers on Tea plantations fell into the category of the unlendable, LakJaya ventured into granting loans to estate workers in collaboration with estate management companies. These loans were granted to upgrade the estate workers living quarters (line rooms) and for electrification of same. Today LakJaya has financed about 2000 estate workers.