Arpico Finance to move into micro finance, gold loans

The favourable macro economic conditions such as low inflation and low interest rates, and a confident stock market has paved way to increase business confidence while creating a healthy investment backdrop to grow the business in the country.

Arpico Finance Company PLC Chairman Pratapkumar de Silva predicted growth in the overall economy.

He said this would assist the finance business and micro economic sectors to grow. The expenditure control, non-inflationary funding of large infrastructure projects has also contributed to achieve this over growth.

Total income of the company rose to Rs 352 million by 33 million or 10 percent for the financial year 2009-2010. The interest income from investments rose to Rs 311 million from Rs 262 million indicating a 19 percent growth.

Interest expenditure recorded Rs 209 million by Rs 18 million or 9 percent.

Consequently, the net interest income rose to Rs 102 million by Rs 31 million or 44 percent. Trading in dealing stocks recorded a profit of Rs 16.3 million for the financial year 2009-2010.

However, the unhealthy performance in the real estate business has affected the overall profitability of the company.

The pre-financial VAT and tax profit for the year was Rs 15.3 million down from Rs 19 million by 19 percent and the post financial VAT and post tax profits for the year were Rs 9.3 million and Rs 11.7 down from Rs 15.6 million and Rs 12.2 million respectively a year earlier.

The company has also installed both processes and personnel to capitalize on the opportunities as declared.

He said that company policy is to preserve liquidity and portfolio quality for the long-term instead of achieving short-term profitability. The core business of the company performed better and added value when compared to the last year.

Company was able to achieve these results due to aggressive market penetration with newly launched gold loans and micro finance products, healthy recoveries and decline in market interest rates.

The company is planning to make a way into micro finance and gold loan segments, which are showing tremendous growth with the economic recovery in the world.

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