Abdul Hassan Mohamed Riyaz
Multi Finance - a successful journey since its inception
Indunil HEWAGE
Multi Finance, a subsidiary of the Entrust Group in Sri Lanka, has
been in business for 38 years and is poised to expand its presence in
geographically strategic places across the country by further
introducing innovative, cutting edge financial solutions for Sri Lankan
customers.
In an exclusive interview with the Daily News Business, Multi Finance
PLC, Entrust Securities PLC and Entrust Limited, Group Executive
Director/Group CEO Abdul Hassan Mohamed Riyaz spoke about the Multi
Finance journey since its inception in 1974 and its future growth plans
to this column.
Q: What is the Multi Finance position
in the context of the current financial sector in Sri Lanka?
A: Multi Finance PLC is a
registered finance company with the Central Bank of Sri Lanka and listed
on the Diri Savia Board of the Colombo Stock Exchange.
Multi Finance PLC was established in 1974 and has been in business
for the past 38 years. Multi Finance PLC provides leasing and hire
purchase financing to its customers together with other financial
accommodations. The Company further extended its product portfolio with
the inclusion of granting business loans and mortgage facilities on a
selective basis, together with pawn broking activities. In addition, the
Company mobilises funds by way of fixed deposits and savings accounts.
Name in full -
Abdul Hassan Mohamed Riyaz
CEO Abdul Hassan
Mohamed Riyaz |
Date of birth
- June 21, 1966
School attended - Isipathana College, Colombo 5
Academic Qualifications:
Bachelor of Business Administration (Honours)
- 2nd Class Upper
Division ,(Specialized in Financial Management with special emphasis on
Investment Analysis and Portfolio Management) University of Colombo, Sri
Lanka -1994
Msc (Management), University of Sri Jayewardenepura - 2005
Professional Qualifications:
Associate Member (ACMA - UK) Chartered Institute of Management
Accountants ,UK (CIMA) -1995
Advanced Certificate in Marketing, Chartered Institute of
Marketing(CIM) -1993
Employment Experience:
Riyaz received his initial training from Ernst & Young, an
international firm of Chartered Accountants. He counts nearly twenty-one
years experience in the field of Investment Management. Prior to joining
ESL, he was attached Union Assurance Ltd. (UAL) in the capacity of Head
of Investments, overlooking the entire fund management activities of UAL
including policy making.
He has also gained immense training exposure attending several
overseas programmes conducted by the Euromoney Training Institute in
Singapore and UK and by the FALIA - Life Insurance Co. in Tokyo, Japan.
Riyaz counts over 23 years experience in the field of corporate finance,
investment management, treasury management and risk management.
Currently he overlooks the entire operations of Entrust Securities
PLC, Multi Finance PLC and Entrust Limited as the Group Executive
Director/Group CEO.
Personal information:
Marital status
- Married. Children - - Three (two daughters and son)
Interests
- Music, Rugby and Cricket |
Multi Finance was taken over by the “Entrust” Group four years ago.
Initially, they were into the small tickets business, which is a good
call. When the “Entrust” Group bought over the Multi Finance, it was put
into the registered finance company operation, such as leasing, higher
purchase, fixed deposits, pawning and a variety of loan facilities.
We were consolidating our position specially during the period
2010-2011 and started to do real trade leasing recently. Earlier, we did
not think of an aggressive expansion plan, However, this year we are
going for an aggressive expansion plan. Even though Multi Finance is a
relatively small company, we do have an expansion growth. Even though we
are a 38-years-old company, we really got into the finance business
during the past four years and is growing day-by-day, I am sure that in
the near future, Multi Finance will go to a medium trade category.
"However, 2012 is a tough and challenging year. I think during
challenging years, you get a lot of opportunities, so this year too, we
will be aggressively going ahead.
Multi Finance is in the process of geographically expanding its
business activities, whilethe product range would also be expanded. In
addition, we will be aggressively getting in to the pawning business,
which has been identified with 8-10 pawning centres and will be getting
into those areas as well during this financial year.
Q: With the increase in motor vehicle
taxes, what will be the impact on higher purchasing and leasing?
A: We have realised
sometime back that with the increase and decrease in taxes during
different periods when taxes are reduced, there had been a good sale of
vehicles.
However, there would be a two way impact on prices; the increase in
import duty as well as fluctuation of currency which has been a great
impact to a certain extent. However, there is still a potential for
finance companies to engage in this business.
Relatively, there will be a drop in leases; while higher purchase
business would improve due to increase in taxes and currency and prices
of vehicles may increase. In this context, affordability will be
somewhat threatened.
However, the second hand market we are talking about, registered
vehicles will have a demand, the higher purchase business will increase.
Q: What are the advertising campaigns
that Multi Finance has undertaken in Sri Lanka?
A: We do have a relatively
better advertising campaign than last year. This year, we had an
Avurudhu campaign, where we offered gold coins and various other gifts
to depositors who have invested with us.
We are in the process of having another promotional campaign and hope
to offer attractive gifts to customers who invest with us for a period
of one year. So, this year too, we do have a lot of promotional
campaigns which are definitely going to increase the base of Multi
Finance.
Q: What were the initial challenges
you have faced?
A: When we took over, we
were a very much strong company and still is. There had been a
requirement for the Central Bank to infuse additional capital to this
company, so the former shareholders were unable to meet the requirement
and invited us to take over the company. So we infused the necessary
capital.
Throughout the crisis, we had adequate funds and were among the few
companies to lend the public money during a crisis. As far as Sri
Lanka’s finance industry is concerned, there may be stiff competition.
But we are very fair and do not undercut anybody. What is important is
corporate governance. We believe in total compliance and follow almost
all directives of the Central Bank.
Multi Finance has branches in strategic centres such as Kurunegala,
Matara, Anuradhapura, Gampaha, Ratnapura , Kandy and Colombo. The next
branch we expect to open is in Jaffna, in order to expand our presence
across the country.
Q: How has 2012 been so far for Multi
Finance; and your views on the finance industry?
A: It is going to be a
very challenging year. With these challenges, there would be a lot of
opportunities. There is a threat on foreign exchange, while interest is
on a rising trend, the economy is suffering.
If you take a finance company, we have noticed when the interest
increases, the deposit floor gets much higher, people prefer to have a
decent return for their hard earned money.
During the period when interest rates were low, we have seen most of
the funds being invested in the equity market where the share market was
doing well. Unfortunately, the share market is not doing well, plus the
interest rates in finance companies have increased quarterly. The only
challenge we have is when interest rate goes up, our lending rates will
also increase, which means, there is relatively a high possibility of
people taking money by way of lease and higher purchase, where
defaulting relatively would be high.
However, if you manage your credit properly, there is still ways and
means of mitigating the risk elements. So we are a company who is very
concerned about credit. We are also expanding our business, so we have a
very balanced approach in granting facilities, because whenever we grant
facilities, we ensure that recoverability is safe. For a finance
company, what matters, is maintaining the Non Performing Loan (NPL)
ratio at the lowest rate. Ours is less than one percent, which is very
much below the industry average, which indicates all facilities granted
by us is safe. Therefore, depositors need not worry about their
investments.
Q: What are the achievements of Multi
Finance?
A: There was a mandatory
requirement of Central Bank of Sri Lanka that all registered finance
companies be listed before the end of June, last year. We managed to get
listed before the deadline which was an achievement for Multi Finance.
We have moved into traditional finance businesses, by going for the
small ticket business and managed to expand the business areas. We do
have a Board of Directors who are very exposed and competent in the
field of finance. In time to come, there will be many more achievements
qualitatively and quantitatively which the general pubic will get to
know.
Q: As the CEO, how are you going to
support the future growth aspirations of Multi Finance?
A: Yes. The Sri Lankan GDP
growth was supposed to go at 8 percent, which had been revised down to
7.2 percent, which I believe is still a decent growth. With these
changes in the micro and macro field of the economy, we do have a lot of
challenges as well as opportunities. I believe nothing can go wrong, if
we implement proper plans whilst, ensuring that we have proper risk and
credit management.
Q: Any diversification plans?
A: Yes, we do have plans.
For a finance company. There are various other new areas where we can
venture into.
Yes there are two or three areas we have planned and are presently
doing the ground work and awaiting the right time to get into new
product areas.
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