LOLC to penetrate into micro finance overseas

Shirajiv SIRIMANE

Lanka Orix Leasing Company PLC (LOLC) is looking at making further inroads to the micro finance sector overseas.

“We are looking at opportunities in Papua New Guinea, Myanmar and Nepal,” said Deputy Chairman of LOLC, Ishara Nanayakkara. He said that they are currently looking at partnerships and when they move into these countries LOLC would be a true conglomerate.

Speaking to Daily News Business he said that LOLC acquired 19% of PRASA Micro Finance in Cambodia in 2006. This acquisition was in keeping with the company’s pursuit in developing rural Sri Lanka. In addition, this investment has brought in technical expertise in the micro finance business for the company and opened avenues for many business opportunities in Cambodia. The change in business strategy also delivered 297% growth in profits. PRASAC concentrates exclusively on lending operations at village level.

LOLC pioneered in introducing Leasing and Factoring solutions to the financial services sector of Sri Lanka which has significantly contributed towards uplifting the SME sector of the country.

LOLC financial services sector strengthened its position and remained the main contributor to operating profits. Attractive interest rates commanded by the Group for its lending portfolio together with effective portfolio management steered the companies to improve their income earned from the financial services business by 49% to Rs 13 billion for the nine months.

Strong collections by the marketing and recovery teams strengthened the Group’s collections ratios which are the best in the industry and this significantly improved the quality of the loan portfolio. The corresponding income for the same period in 2010 was Rs 8.8 billion.

He said that currently LOLC is concentrating on six sectors, financial services, agricultural and plantation, renewable energy, leisure, construction, trading and manufacturing areas.

“With the acquisition of Dickwella Resort we now have over 625 star class rooms in the Southern belt and are now looking at reaching out to Pasikudah,” he said.

Nanayakkara said that as a company they are bullish on Sri Lanka as they did well during troubled times as well.

With the fuel hike they are also looking at reactivating their solar power sector and are looking at aggressively investing in the renewal energy sector.

LOLC recorded Rs 9.3 billion profit before tax for the nine months ended December which is an excellent growth of 30% compared with the previous year. The resultant PAT recorded a 31% growth over the last year at Rs 7.9 billion.