RFCs must go for CSE listing

Charumini de Silva

Registered finance companies being listed in the stock exchange helps to create better transparency, encourage good corporate governance and build an improved public image. Getting listed in the CSE will help companies to raise capital in an efficient manner. This will boost the finance sector and also help to expand the country’s economy and contribute to job creation, Citizens Development Business Finance Limited (CDB) CEO Mahesh Nanayakkara told Daily News Business.

Here are excerpts of the interview with him.

Q: How did you enter the industry?

A: I was selected to the Sri Jayewardhanapura University after sitting for my A/Ls in 1988.

The situation in the country at that time was not good and the universities were closed for two years. Therefore, I started working in a leading merchant bank in 1989.

I pursued my degree along with my job. I worked in that bank for 12 years and joined CDB in 2001 as the Assistant General Manager-Credit. In 2004 I was appointed as the CEO of the company.

Looking back, I feel satisfied for being rewarded for having faith in this country without opting for greener pastures of migration. I am very glad that we all enjoy the dividends of peace.

Q: What are the opportunities available for industrialists in your industry?

A: There are many opportunities in all sectors of the economy not only for the financial services industry. With the world economy recovering from the financial meltdown and Asia leading the global recovery creates a new era. The Central Bank is projecting low inflation rates, while having a stable interest regime and high growth rates after the end of nearly three decades of war.

This will have a tremendous impact on the financial services industry. With a target of Gross Domestic Product (GDP) over eight percent, improved sovereign credit ratings, private sector revival, a vibrant stock market rapid acceleration of tourist arrivals; integration of northern and eastern economies with the national economy, reflecting strong confidence among investors highlight a strengthen economy where the entire country will have many opportunities for all industries. Global business icons setting up ventures will change the business climate in the country.

Q: What are the challenges you face in the industry?

A: Keeping space with the rapid an accelerated changes that are taking place in our country with the accelerated economic growth itself would be a challenge to the industry. Historically, there has been a narrow product range for the financial services industry. The industry is now focusing on expanding the product range and diversifying the classes of assets in the balance sheet.

Customers are enthusiastic about new financial products. Another key challenge is to manage the maturity gaps of assets and liabilities. Channelling funds to the rural areas would be another challenge as well as a responsibility of the industry.

Available figures reflect that rural savings far exceeds rural lending from the formal financial sector. There are many possibilities and opportunities in the rural sector. Seeing the prospects CDB will support and expand our rural involvement and it is our intent to position CDB as a net lender to the rural economy.

Q: What are the strategies that should be adopted to uplift the industry?

A: The sound economic environment is now stabilized and it is upto the individual institutions that have to harness from this immense opportunity. It will be the capabilities of the players that will sustain the growth momentum.

There is a vast potential for all the sectors and different strategies should be adopted. Along with innovation we must also adopt technology to enhance the productivity.

Q: How many jobs have been created through your financial institution and how many branches are there at present?

A: There are over 550 employees at CDB and we have 33 branches in operation.

We have set up four branches in the Northern and the Eastern province and in early February we will open another branch in Trincomalee.

The employees that are in the Northern and the Eastern province branches have been recruited from these areas itself. We emphasise on providing opportunities to rural youth since mid 2009 up to now our head count has increased by over 150. Out of our 33 strong branch network 17 are located outside Western Province.

Q: What is your view about entering the capital market?

A: It is indeed a very good move. Registered finance companies being listed on the stock exchange helps to create better transparency encourage good corporate governance and build an improved public image. Getting listed on the CSE will help companies to raise capital in an efficient manner. This will boost the finance sector and also help to expand the country’s economy and contributes to job creation.

Q: What is your philosophy in life?

A: I believe that I am a socialist at heart and capitalist in mind. So this helps me to work closely with people and I firmly believe in producing extraordinary results working with ordinary people.

Q: What are the favourite places you like to visit in Sri Lanka?

A: I like elephants very much and I would prefer going to Udawalawa, Yala, Minneriya and Pinnawala where elephants are a familiar seeing.

Q: What do you do in your leisure?

A: Watching tv, reading and listening to music.