LOLC finance units outside Sri Lanka brings most profits
ECONOMYNET – Sri Lanka’s LOLC group, which has interests in finance, agriculture and leisure, said its micro finance units in East Asia brought 12.7 billion rupees in profit after tax, with the group reporting consolidated profit after tax of 10.7 billion rupees.
LOLC said total assets in foreign units were 560 billion rupees, with a loan portfolio of 450 billion rupees and a deposit base of 280 billion rupees.
“Therefore, LOLC is determined to further penetrate the Asian markets whilst exploring opportunities in other regions such as Africa,” the firm said.
LOLC said it started foreign investments with buying a 19 percent stake in PRASAC Microfinance Institutional Limited in Cambodia, a dollarized economy, investing 62 million rupees.
The stake has since been expanded to 70 percent. PRASAC had a lending book of 354 billion rupees and 236 billion rupees in deposits, and 435 billion rupees in assets. It had a customer base of 400,000.
The firm had shown profits of 10 billion rupees in the nine months to December.
LOLC invested in a second unit, in the country, LOLC Cambodia Plc, in 2014. LOLC says it has become the second most profitable micro-finance company in the country with an asset base of 112 billion rupees and customer base of 236,000.
LOLC says it has a 97 percent stake in the firm, which was set up 24 years ago by a non-governmental organisation.
In 2014, LOLC MyanmarMicrofinance Co., Ltd (LMML) was set up as a greenfield operation.
In 2017, the Government of Pakistan and the Sultanate of Oman, had invited LOLC to be the majority shareholder of their joint venture, Pak Oman Microfinance Bank Limited (PakOman).
LOLC had taken a controlling interest in PT. SaranaSumut Ventura (PTSSV) in Indonesia, which has a population of over 265 million.
In 2018, LOLC had also invested in LOLC ASKI Finance in northern Philippines and and LOLC Development Bank in the south.
“Considering the social impact created in both Indonesia and Philippines, and identifying the tremendous potential going forward, the respective regulatory bodies and several Development Financial Institutions (DFIs) have expressed their interest to work closely in these initiatives,” LOLC said.
LOLC group had been funded from time to time by the Dutch Development Bank – FMO, The French Development Agency-PROPARCO, German Government Agency – DEG, and the Asian Development Bank (ADB).
LOLC group’s total assets including in Sri Lanka grew to 1,008 billion rupees by December 2018, up from 770 billion rupees a year earlier.
“Now, we have a balanced and diversified investment portfolio and will pursue to invest further into selected markets in Asia and other emerging regions with the objective of enriching the livelihoods of the small and medium entrepreneurs,” LOLC Managing Director Kapila Jayewardene said.
Sri Lanka’s rupee collapsed in 2018, with the Central Bank starting contradictory monetary and exchange rate policies from the first quarter of the year. (Colombo/Mar05/2019-SB)