Tuesday, 17 January 2012

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Divisa Finance committed to deliver superior service

Indunil HEWAGE

Divasa Finance Ltd
Director CEO
Lakshman Uduwara
was interviewed by the
Daily News Business
for “Tea with CEO”.

Divasa Finance Ltd., would be obtaining a listing in the Colombo Stock exchange within next two three week.was registered as a finance company 2011 under the Finance Companies Act No. 78 of 1988. The company operated since 2005 under the name 'Asia Commerce Ltd' an approved leasing company under the Finance Leasing Act.

Lakshman Uduwara
Picture By -Sulochana Gamage

Divasa Finance was established by a group of young professionals. It is with this belief and spirit that a company willing to support entrepreneurs with a complete suite of financial solutions was conceptualized and strategically implemented.

Divasa Finance is committed to delivering superior service that surpasses all industry benchmarks. Integrity, transparency and accountability are ingrained into the company which thrives on good governance, operational excellence, financial discipline and smooth processes.

Here are the excerpts of the interview

Q: How has the company performance been so far?

A: Divasa Finance has experienced a substantial growth since its inception. In 2010, the company earned Rs 1.7 million. In march we had zoomed it up to about 68 million and up to September, Divasa Finance earned around Rs 33 million. The growth has been attributed to the strategic decisions taken by us and the entrepreneurial, astute capabilities of the board of directors.

Q: What do you think is the outlook for the leasing industry in Sri Lanka?

A: Initial challenges that I could see is the dearth of capital as well as tough competition for deposits. Both are necessary for any finance company to grow.

But I see a silver lining as Central Bank Exchange Control Department has relaxed certain regulations for the benefit of the local finance companies.

With these prudent policies taken by the government and the Central bank ,any organization is able to seek outside borrowings by way of foreign fund subject to approval of Central Bank on case by case basis.

If the capital or liquidity is not here, anyone can go for outside borrowings where the interest rates are quite low. There are people willing to lend with low interest rates. That will be an encouragement as well.

In the present market, there is a liquidity crunch, earlier, it was a liquidity surplus. Today, liquidity has become negative in Sri Lankan market.

Time has come to seek outside borrowings with the present situation in the market.

Q: What are your suggestions to the government to uplift the industry?

A: When you look at the global scenario, Eurozone is in a crisis where 50% of Sri Lanka garment export goes to these countries. There is some sort of recession in USA as the remaining of local garment exports goes to USA market.

In the meantime, there is a lot of upheaval in countries such as Yemen, Libya, Iraq and Iran.

These are the countries where we export a large proportion of Ceylon tea. By any chance, if our exports are stalled or reduced, there will be a major upheaval here. It will directly affect the local economy and the income level to a greater extent. Other issues are the unpredictable natural perils which have recently affected some of our major export markets.

However these are the negative and positive points that I see in the Sri Lankan economy. If Sri Lanka gets adjusted to these things negatively or positively, consequences will come to the leasing industry.

Q: How has ongoing development initiatives benefited your business?

A: Credit has been growing, the credit development and credit growth has been increasing in the country. Fixed deposits, liquidity is now again peaking up , so you can see the scenario of interest rates gradually rising.

That will definitely increase the cost of borrowings, so the finance companies perennial issue is the cost of funds, there is a way of relaxing the cost of funds by way of resolving to saving accounts and that has to be offered coupled with the ATM machines.

People can withdraw money at their convenience. Finance companies will have to tie up with banks that produce enough ATM machines at every branch.

Q: Any future plans?

A: We would be obtaining a listing in the Colombo Stock exchange within next two three week. Within a month or two, we would be listed in the Colombo Stock Exchange.

Divasa has five branches with the newly opened branch in Wennappuwa, and looking at opening three branches per year, most of these branches will be in the western province.