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'Policy makers should give more priority to leasing industry'

Nishaman Karunapala

The leasing industry is the main facilitator and the catalyst of the SME sector therefore the policy makers should give more priority for that, the Leasing Association of Sri Lanka (LASL) new President Nishaman Karunapala said. Speaking at the AGM held recently he said the industry also attracts people from the informal money market who are fed into the formal banking sector through offering leases which is an invaluable service which has been rendered by its members.

He said the industry is facing new challenges as it is a dynamic industry servicing all cross sectors of the economy. One of the main challenges faced by the industry is the lack of medium term fixed rate funding as 99% leases offered are at fixed rentals. He said this issue is mainly due to the underdeveloped debt market. This issue needs to be addressed at Macro Level.

Karunapala said that the leasing industry has become a systematically important industry as seen by last year's disbursement figure of around Rs 200 billion, while the comparable figure for 2009/10 was around Rs 90 billion.

Appreciating the reduction of overall NPL of the industry from 9.7% to 6.5% he said it is a good indicator of the economy. He hoped that the industry will grow at a higher pace this year as well. Since the industry is mainly catering to the SME sector it will also facilitate to achieve per capita income of US $ 4,000 in 2016 as planned by the government.

Referring to future plans he said since the industry is growing at a rapid rate it is important to gather and disseminate information in a timely manner. Therefore an up to date database will be developed for the benefit of members and to continue training sessions regularly to update members and constantly improve efficiency levels of the industry.

He said, "The Immediate challenge faced by the industry is to implement IFRS and LASL will conduct workshops to educate the members and closely liaise with respective bodies for the smooth implementation of IFRS."

He said the most difficult part would be system modifications to cater to these requirements.

 

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