More finance companies needed:

Global Finance Services to focus on micro credit

Sanjeevi Jayasuriya

Sri Lanka’s financial market needs more players with wider investment instruments, a top analyst said. “There is healthy competition among the industrialists and it is important to build confidence to attract depositors. It is necessary to provide enhanced training opportunities to fulfil cadre requirements with the expansion of the financial industry, Global Trust Financial Services Limited Managing Director Susantha Fernando told Daily News Business.

“The country’s financial sector will experience a growth momentum in keeping with the expected economic growth. There will be a substantial market for prudent financial instruments. More finance companies are necessary to meet this demand,” he said.

Global Financial Services Limited (GFSL) has applied to be registered as a leasing company with a capital of Rs 75 million and in the process of obtaining the licence as a leasing company from the Central Bank.

They plan to apply for full financial company status meeting the Rs 200 million capital requirement.

The company has identified potential investors and they would come on board within the next three months.

“The company will be listed and go for an IPO within the next two years,” Fernando said.

The GFSL will concentrate on the micro finance sector. They have already set up credit centres at Grandpass, Kotahena, Negombo, Kochchikade, Wennappuwa, Keselwatte, Horana, Matara and Batticaloa.

These credit centres are fully equipped to handle gold financing activities with all necessary infrastructure including vaults, interiors and other improvements.

The main branches will be in Negombo and Matara.

“There is a vacuum in the micro credit sector where loan applications are entertained only from people with collaterals.

The GFSL is interested in catering this sector.

The public fear to deposit monies in financial companies should be addressed with properly constituted companies with acceptable names as directors should be formed to overcome this problem.

The company plans to introduce a special scheme for pensioners with higher interest rates for those who depend on interest income for their daily living. “We will offer 25 percent more than normal interest rate for senior citizens above 60.

“Once we obtain full finance company licence we will convert the existing credit centres to fully fledged branches. We have identified Embilipitiya, Ratnapura, Jaffna, Trincomalee, Vavuniya, Mannar and Kilinochchi as our priority areas,” Fernando said.

They have also negotiated for a accredit line with low interest rate for the benefit of customers.

The GFSL Director Board comprises Chairman M.R. Fernando, Deputy Chairman K.A.K. Kodituwakku, Managing Director Susantha Fernando, Director M.A.P. Perera Seneviratne and S.A.K. Alahakoon.