ECONOMYNEXT- Sarvodaya Development Finance has helped modernize Sri Lanka’s farmers with mechanization, promoting agro insurance and is now getting them used to digital tech, Chief Executive Nilantha Jayanetti said.
He said, 80 percent of the SDF portfolio is outside the Western province and out of that close to 90 percent is based on the agro-economic activities that are happening in villages.
SDF had helped finance farmers and rural communities to modernize by helping them purchase combine harvesters, tractors and rice mills.
“Their efficiency has gone up and we have reduced their wastage,” Jayanetti said.
Jayanetti said the SDF has taken into consideration the farmer’s repayment capacity based on the seasonal income and also got them used to agro insurance.
“Most of the financial institutions, have not linked agrarian insurance products to the borrowers, but we have excelled in that area and as a result, our NPL has been less than 1% of agro-based leasing portfolio”
Jayanetti said SDF has been promoting organic fertilizers, and due to that farmers who are part of Sarvodaya clientele are facing fewer difficulties under the current fertilizer ban.
“We started it more than five to six years ago,” Jayanetti said. “And as a result, most of our farmers, this recent change from chemical fertilizers to organic is actually not something they experienced a while ago because we have trained them”.
Sarvodaya has 5,400 development societies covering 15,000 villagers and the societies are being connected through 51 branches and service centres around the country.
At first the 5400 societies under the program were operating in isolation. However, steps are now being taken to connect these societies through digital devices.
“This is basically what we call a shared economy ecosystem,” Jayanetthi said. “And we can promote those products to the market in Colombo maybe in Kandy or the main economic centres, and we can go beyond boundaries.”
Jayanetti said using the Sarvodaya Village Smart app, the societies under the program can upload data of products or the service provided and anyone in the country can place their order online.
Listing and Foreign Funds
Sarvodaya Development Finance is going for a billion rupee initial public offering which is opening on November 23, 2021.
The listing is expected to open the door for more funding.
“When we list ourselves, we are more visible,” Jayanetti said. “And our numbers are very visible and anybody can have access to our numbers.”
“And more importantly, we are looking at a bigger picture of attracting low-cost funds to the organization in order to accommodate the ever-increasing demand of these financials.”
“Even the foreigners, when they look at these financial institutions, they prefer the entities that are listed at the Colombo Stock exchange.”
The over 9-billion-rupee total asset worth company was originally started to create a rural-area centric business to keep the savings of rural depositors in the same area and to serve needy entrepreneurs.
As of now, 52 percent of the SDF is owned by Sarvodaya Economic Enterprises Development Services (SEEDS) Limited, 22 percent by Sarvodaya related entities, and 13 percent each by Japanese Gentosha
Total Asset Consulting Inc. and other existing shareholders.
The SDF has 30 branches and 21 service centres island-wide and its profit after tax in the past four years (2018/2021) has shown a growth of 23.4 percent calculated on a three-year compounded annual growth rate (CGAR).
The profit after tax in the last financial year ended on March 31 rose 80.3 percent year-on-year to 183.4 million rupees, the company data showed.
The total asset and equity also have expanded at 12.4 percent and 24.5 percent compiled on the same three-year CGAR basis.
The loan growth, which was at 2.76 billion in 2016 had almost tripled in the last financial year ended in March 31, 2021 to 7.9 billion rupees.
It also had a total deposit of 4.55 billion rupees from customers by the end of 2018/19 financial year. (Colombo/Nov17/2021)