PLF to reach rural Lanka with novel products

Indunil Hewage

Sri Lanka’s largest Non-Banking Financial Institution, People’s Leasing and Finance is focused on a massive expansion drive both home and abroad whilst maintaining its high growth trajectory by achieving record revenue in the recent past.

People’s Leasing and Finance General Manager /CEO D.P Kumarage in an interview with Daily News Business talked about the leasing industry prospects, challenges and People’s Leasing and Finance’s future growth aspirations.

Excerpts of the interview

Q: What is the concept behind People’s Leasing and Finance and how has 2013 been so far for your company?

Established in 1995, People’s Leasing and Finance is the unshakable leader in the leasing industry with two international ratings. Our vision is to become legendary in the financial service scene as a provider of customer friendly, creative and innovative total solutions.

People’s Leasing and Finance PLC merged with its subsidiary People’s Finance PLC by April 2013, consequent to the Finance Business license approval and concluded one of the biggest debt market deals; Rs. 6 billion worth of debenture issue this year. Today we have built an extraordinary tradition of excellence in all spheres of leasing and is now the established market leader in the country’s leasing industry with a market share of over 22%.

PLF is now a major contributor to the success of its parent company, People’s Bank. As a subsidiary of People’s Bank, the group enjoys the strength and recognition of its parent and the flexibility of the private sector. We are the flagship subsidiary of People’s Bank and have contributed almost 39% of profit to the People’s Bank while being the best customer of the bank at the moment.

Q: What are the sources of financing of PLF?

The company accepts deposits from the public. Prior to that, we were taking borrowings from the market including the commercial banks and securitization; where we pledge our lease portfolio and raise funds based on that. At present we are borrowing from foreign sources as well. I would say it’s a combination of all. In addition, PLF is in negotiation with Middle Eastern banks to raise US$ 100 million club loan to finance the company’s future working capital requirements and we have already got the necessary approvals for the transaction.

We were the first company in the country to raise $ 10 million under the External Commercial Borrowing Scheme introduced in the government’s 2013 Budget .The Budget allows corporate entities to borrow upto $ 10 million per annum. The local companies with good ratings are allowed to borrow from international markets; those investments are exempted from withholding and income tax. These initiatives will significantly improve debt market activities where we will be a direct beneficiary.

Q: What is the future outlook for leasing industry in Sri Lanka?

Last year was a special year for almost all the leasing and finance companies in the country as the market did not pick up due to various reasons.

The currency fluctuation, credit crunch, duty and interest rate aspects had a direct impact on the entire industry performance. However I believe that with the new mega development projects coming in, there will be a revival in the industry and this situation will improve.

Q: Achievements?

The PLF is Sri Lanka’s largest and highest rated finance company with two international ratings. The company achieved the prestigious Gold award for the Best Annual Report for the fifth consecutive year and were adjudged as one of the best 10 corporate citizens in the country. These awards shows the consistent excellence achieved by company and also reflects on the transparency of the organization, which is also a vital factor in inviting new investors.

Q: Future investment plans of PLF?

We will focus on building investor relations internationally while expanding our branch network particularly in the deep rural areas. We currently have a good presence in the North and East areas and our reach will be more in the coming years with the expansion of our footprint in the deep rural areas in the country. In addition, existing window offices will be converted into branch level and we will keep on introducing new products to the market with our reach is going to expand more and more with mergers.

The branch expansion plan will keep in line with the Government’s regional development programs,with special focus on the small and medium scale entrepreneurs of the country. As a subsidiary of People’s Bank, the company receives Government protection as well as the flexibility as a part of the private sector.

People’s Leasing and Finance is also aggressively looking at new business opportunities both home and abroad, particularly in Vietnam, Myanmar and Indonesia.

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