Sri Lanka’s non-banking financial sector has spent the past four decades absorbing customers into the formal financial system, providing access to a regulated, holistic financial ecosystem.
Few institutions illustrate that trajectory as clearly as LOLC Finance, which has been ranked by Brand Finance among the country’s 100 most valuable brands for five consecutive years, a run stretching back to 2022.
In the 2026 Brand Finance Sri Lanka 100 rankings, LOLC Finance advanced to 15th place with a brand value of Rs13,788 million, underscoring the sustained strength and growing market relevance of its brand.
Behind that ranking is a company that built its scale not by waiting for the market to come to it, but by designing products around segments the wider industry had written off as unbankable.
For Krishan Thilakaratne, Chief Executive Officer at LOLC Finance, that history is inseparable from what the brand represents today.
“It’s not a financial transaction,” he says. “It’s about getting people out of poverty and improving their livelihoods. Sometimes it’s a partnership, a journey that takes probably a decade.”
The company describes itself as a people’s brand above all else and that positioning was earned well before LOLC Finance became the country’s largest non-banking financial institution.
Designing Around the Customer, Not the Collateral
Financial inclusion, for Thilakaratne, is not a marketing position; it is the design principle behind every product LOLC Finance builds.
He identifies several reasons a customer is typically excluded from formal finance: the institution’s risk appetite, the customer’s own choice, or the customer simply not looking commercially attractive to the institution.
“Sri Lanka has developed a significantly large informal financial market,” he says, citing internal sector and community savings and cooperative systems as the alternatives customers turn to when formal institutions fail them.
LOLC Finance built its business to bridge that gap. The shift behind that strategy was structural.
“The banking industry was mostly based on collateral-based lending,” Thilakaratne says. “But we understood that it’s not just the collateral that matters, it’s the cash flows that play an integral role in the process.”
A trader’s cash flow looks nothing like an industrialist’s, and LOLC Finance built its repayment structures around that distinction rather than a standard template; a farmer’s paddy income arrives twice a year, sugar farmers are paid annually, and other crops run on three-to-four-month cycles, therefore lending is structured to match.
“When you structure your products in that manner, we see the repayments are significantly better,” he says.
That same logic: understand the customer first and design around them, runs through a product range built for markedly different segments.
In January 2025, the company issued Sri Lanka’s first Braille-enabled credit card, designed to ISO standard, allowing visually impaired customers to identify their card by touch.
Its electric-vehicle financing extends to battery replacement once the manufacturer’s warranty lapses, the provision competitors have yet to match.
Its gold loan service, Ran Savi Red Carpet, sends a representative to a customer’s home to value gold in person, removing the need for a branch visit.
Savi, a lifetime-free credit card built for public servants, accounted for the bulk of the 27,394 new credit cards LOLC Finance issued last year.
A savings account launched in July 2025, aimed at freelancers, farmers and construction workers whose income does not arrive as a fixed monthly salary, extends the same principle to savings that the company applied to lending.
Serving Both the Unbanked and Underbanked
Thilakaratne draws a distinction between being served and being served adequately, one that applies even to the wealthiest customers. “Some of these high net worth, high-end SME customers,” he says, “are not served; in fact, they are underserved.” Islamic finance was his example: LOLC Finance moved early to formalise the offering, more than 20 years ago, well ahead of the many competitors who have since followed, building it into Al-Falaah, its dedicated alternate financial services unit.
The proposition, he says, rested on three principles: strict adherence to Sharia guidelines, pricing and process on par with any conventional product, and a design intended for all communities rather than a single one. That last point shows up in the customer base: roughly 20% of Al-Falaah’s customers are non-Muslim. “It’s an absolute household name,” Thilakaratne says, though he considers the opportunity largely untapped. “I still believe that we have not even served 10% of the market yet.”
The financial records in LOLC Finance’s latest annual report support that confidence. Al-Falaah’s profit rose 32.94% to Rs3.15 billion as at financial year end March 2026, and revenue up 29.59% to Rs9.01 billion.
Its non-performing loan ratio, at 3.45%, sits below the 5.02% recorded across the company, and its return on equity, at just over 30%, is the highest of any segment the company reports.
Financial literacy is treated as part of the product rather than a peripheral. initiative. “We actually teach our customers the savings habits, insurance habits,” Thilakaratne says. “It’s not just a business. It’s a duty and a responsibility.” That approach has translated into fewer defaults and stronger repayment discipline, particularly among micro customers, the segment a conventional lender would typically flag as highest risk.
From Four Market Leaders to One
Asked what shaped LOLC Finance into its current form, Thilakaratne points to a decision to acquire scale rather than build it organically. Four established businesses came together over time, among them LOLC Development Finance, originally BRAC alongside LOLC Finance, Sinhaputhra Finance and Commercial Leasing and Finance, all of which were strong brands and market leaders across SME finance, microfinance, Islamic finance and working capital finance. The consolidation not only built a large company; it combined businesses that already led their respective categories.
The result is a company Thilakaratne describes in his own terms. “We continue to be the largest SME financier, micro financier, Islamic financier, working capital financier, as well as factoring,” he says. “We have the largest product range in terms of credit cards and the largest market share in the NBFI sector while being the market leader in almost every segment that we serve.” That scale has shifted its competitive frame of reference. “Now we are actually competing not with NBFIs,” he says. “We are actually competing within the overall banking space, whether in terms of assets, liabilities, capital or the bottom line.” In October 2025, Lanka Rating Agency upgraded LOLC Finance’s credit rating to A+ with a stable outlook, citing its market position. None of it, Thilakaratne is careful to note, happened in isolation. “The synergy between regulators, rating agencies, government institutions and other stakeholders plays an integral role in this ecosystem.”
Scaling Without Losing Proximity
Growth of this magnitude typically comes at the cost of proximity; more branches and more products tend to dilute the person-to-person relationships that built the brand in the first place. Thilakaratne rejects that trade-off. “It has been a banking partner for most of its people,” he says of the brand, pointing to accessibility rather than scale as the differentiator. “We made it very easy for our customers to reach out to us… at their convenience,” backed by digital platforms and round-the-clock communication.
Its network of over 200 branches reflects the same principle. Farmers without formal documentation, Thilakaratne says, remain comfortable in the relationships built with staff face to face, a human element which he considers as important as the systems built to accelerate everything else. Those systems are still evolving towards what he describes as a real-time, always-on model of service, one that puts the same access within reach of any customer, anywhere, at any time.
iPay and the Infrastructure Behind the Vision
Technology at LOLC Finance operates on two fronts: iPay, the platform through which customers transact, pay, and increasingly manage a growing share of daily life; and a backend layer built to accelerate decision-making without displacing the human judgement that underpins its lending model.
iPay was among the earliest mobile wallets to launch in Sri Lanka. “iPay has almost 50% market share on JustPay transactions,” Thilakaratne says. “It processes the largest volume of transactions in Sri Lanka, and its ambition extends well past payments, towards everything a person has to do in their day-to-day life: booking travel, settling utility bills and eventually registering a vehicle or a company.’’ Government payments illustrate how far that reach already extends. “The best example is paying the traffic police fines,” Thilakaratne says, noting that few would once have expected settling a traffic fine to become a financial services transaction. Sri Lanka Customs and income tax payments, both currently requiring an in-person visit, are next on the roadmap, alongside a forthcoming national QR code standard that Thilakaratne expects iPay to be first to adopt. “We’ll be the first to be connected, because our platforms are ready.”
The figures support the ambition. iPay has more than 1.2 million downloads, with over 685,000 registered users, and holds more than 50% market share on JustPay, Sri Lanka’s interbank payment system, according to the company’s annual report. It connects to 254 government institutions and more than 3,110 government sub-services, and accepts cross-border payments through UPI, AliPay, UnionPay and WeChat Pay. In April 2026, LOLC Finance won Overall Excellence at the LankaPay Technnovation Awards for the seventh consecutive year.
On artificial intelligence, Thilakaratne draws a firm line between automation and judgement. “AI can play a fairly large role in understanding a customer, but there is still a human role, which is always important,” he says. “AI will be the backend and the engine in processing this. The decision-making will be fast and could be as fast as real time.” A central operations team of roughly 75 staff now supports the entire branch network.
The Decade Ahead
Thilakaratne frames LOLC Finance’s real output in terms broader than its balance sheet, citing a United Nations study on poverty elimination that identifies two levers: education and access to finance. “There are hundreds of thousands of stories,” he says. “Every customer would have a story.”
Sustainability is positioned within that same framework rather than alongside it.
“We would avoid any customer or segment which will be harmful to the environment, or to the communities,” Thilakaratne says.
Most branches and the head office now operate on solar or renewable energy, with energy and water use tracked daily rather than periodically.
The head office is the first NBFI building in Sri Lanka to receive Green SL Institutional Sustainability Certification, and the company renewed its ISO 14064-1 greenhouse gas verification for a third consecutive year in February 2026, part of a stated push towards carbon neutrality.
Its community programmes include the Divi Saviya initiative and school rebuilding.
Sustainability is positioned within that same framework rather than alongside it. “We would avoid any customer or segment which will be harmful to the environment, or to the communities,” Thilakaratne says. Most branches and the head office now operate on solar or renewable energy, with energy and water use tracked daily rather than periodically. The head office is the first NBFI building in Sri Lanka to receive Green SL Institutional Sustainability Certification, and the company renewed its ISO 14064-1 greenhouse gas verification for a third consecutive year in February 2026, part of a stated push towards carbon neutrality. Its community programmes include the Divi Saviya initiative and school rebuilding work following cyclone Ditwah.
Looking a decade out, Thilakaratne measures ambition in terms of reach as much as growth. With just over five million households in Sri Lanka, he wants LOLC Finance represented in as many of them as possible, “through any, whatever the product, single product or multiple products.” Reach, in his framing, is only the first half of the ambition. “We want to have not only the highest mind share, but the highest heart share as well,” he says. “It’s converting it into a transaction, and a relationship. It’s not just a brand that we want people to remember but also a brand that they trust and actually work with.”