An Echelon Media Company
Thursday December 8th, 2022

Sri Lanka fintech start-ups seek funding in virtual pitch

ECONOMYNEXT – Seven Sri Lankan fintech start-ups, which are developing applications for insurance, payments and credit products, are seeking funding backed by Hatch, a start-up incubator which says it is engaged in a virtual accelerator program amid a Coronavirus pandemic.

The firms have undergone an intensive mentorship program guiding and readying them for guidance and investment. They then pitch for investments in a ‘demo day’.

“HatchX, the fintech chapter of Hatch is the first fintech accelerator in Sri Lanka and not only that, but it is also the first of its kind to have kicked off and gone virtual during the great lockdown of 2020…” Randula de Silva, Director, Hatch said at the demo day.

“When we first set off to think of doing a fintech accelerator, the intention was not only really to scout out and strengthen the brightest of the companies in the fintech landscape but also to open a new door towards creating a transformation in the financial sector in Sri Lanka by bringing together all of the stakeholders who are playing a key role in the financial ecosystem.

Sri Lanka has controlled the spread of Coronavirus and most economic activities have resumed subject to social distancing and health rules.

Virtual Pitch

The virtual pitch was streamed across all the continents on multiple forums.

Among potential investors, there were funds, angels, banks, and insurance companies.

Seven fintech start-ups pitched their business proposals – OGO Pay, iLoan, Smart Insure, Direct Pay, Algoredge, Fipbox and Helios P2P, to potential investor at a demo day which was live-streamed to potential investors worldwide.

OGO pay is targeting gig workers. It aims to make financial transaction easier for platforms to accept payments and from then on, the user can immediately with a click pay a loan, invest, or save.

It also documents the transactions thereby making it easier to obtain credit from banks.

“By helping gig workers, we are also helping financial services to reach a market they couldn’t before due to constraints or because they didn’t look at those segments,” Imesh Liyanage, CEO, OGO Pay said.

“For platforms, we make it easier and cheaper to transact.”

OGO says it has processed over 37,000 transactions valued at over 28 million rupees. They are looking to raise 50 million rupees to further develop the business.

iLoan is a middle-man loan provider. It pays a creditor on behalf of a debtor, taking on the risk and the underwriting. Another option it offers is a loan with an interest rate similar to a temporary overdraft (TOD).

Currently, it has 13,000 registered users, over 5,000 loans processed and a loan book of 800,000. It seeks a 500,000 US dollar funding.


Smart Insure, mainly targeting daily-wage earners, handymen and farmers, is a platform connecting an insurer through a base provider. They are partnered with Hutch and Allianz.

Direct Pay – a digital payment platform partnering with Cargills Bank, Sampath Bank, Nations Trust Bank and Commercial bank, provides payment solutions for individuals and businesses.

The services for businesses include an internet payment gateway, virtual Point of Sale and merchant app.

They have done 4.5 million dollars’ worth of transaction with 16,000 users and 7000 merchants and are looking to raise 750,000 dollars.

Algoredge is a big data analytics platform to help businesses make accurate decisions.

“In this age, if an organisation is making a decision which is not data-driven then it is merely an opinion,” Urumila Chandrasekeram, Co-founder of Algoredge said.

The start-up is seeking 80,000 US dollars.

Boosting Innovation

The 4-month long initiative by Hatch in partnership with Lankan Angel Network was funded by Ford Foundation.

“One of the things we are focusing in Sri Lanka is how we can support the innovative enterprises and start-ups that can help us create vibrant and resilient markets which will create an overall societal growth,” Pradeep Nair Regional Director for India, Nepal, and Sri Lanka Ford Foundation, joining via Zoom said

“That’s one of the outcomes and missions ford foundation has focused on, we are continuously looking for partnerships and organisations that can get us there.

“I do believe start-ups have a huge role to play in a country like Sri Lanka. I believe they can take advantage of lessons from other countries both in this region and other countries”.

Hatch started two years ago, with 500 members both in Colombo and Jaffna. It has three incubator programs in house and two accelerator programs. (Colombo/Sep15/2020-sb)

Comments (1)

Your email address will not be published. Required fields are marked *

  1. Jason says:

    Saw the pitches and have to say it’s quite impressive for Sri Lanka!

View all comments (1)

Comments (1)

Cancel reply

Your email address will not be published. Required fields are marked *

  1. Jason says:

    Saw the pitches and have to say it’s quite impressive for Sri Lanka!

Sri Lanka in deep talent drain in latest currency crisis

ECONOMYNEXT – Sri Lanka businesses are facing a drain of talent, top business executives said as the country suffers the worst flexible exchange rate crisis in the history of its intermediate regime central bank and people lose hope.

“We are seeing a trend towards migrating,” Krishan Balendra, Chairman of Sri Lanka’s John Keells Holdings told an economic policy forum organized by the Ceylon Chamber of Commerce.

“We have seen an impact mainly on the tourist hotels side, quite an exodus of staff (migrating) to countries we have not seen in the past. 

“We have seen people go to Scotland, Ireland. It has usually been the Middle East and Maldives. Australia seems like a red hot labor market at the moment.”

Sri Lanka’s rupee collapsed from 200 to 360 to the US dollar after macro-economists printed money to suppress rates.

Sri Lanka operates a ‘flexible exchange rate’ where errors in targeting interest rates are compensated by currency depreciation especially after the 1980s.

Classical economists and analysts have called for the power to mis-target rates and operate dual anchor conflicting monetary regimes should be taken away to prevent future crisis.

Currency crises are problems associated with flexible exchange rate central banks which are absent in hard pegs and clean floats.

“Something new we are seeing is that older people, even those in their 50s, which was a surprise, are looking at migrating,” Balendra said.

Businesses are trying to retain talent as real wages collapse.

Balendra said as businesses they see some stability returning and based on past experience growth is likely to resume, and they were communicating with the workers.

“We have a degree of conviction that the economy should get better, its the stability phase now and it will get better going forward so without the way our businesses are placed we should see good growth,” Balendra said.

“We can’t chase compensation that’s just not practical and we are not trying to do that especially if people are looking to immigrate but what we can do is show the career opportunities in the backdrop of the situation that people would rather stay here because its home.” 

Sri Lanka unit of Heineken says it is also trying to convince workers not to leave, with more success.

“We are all facing the effects of brain drain and it’s not just the lower levels… What we are doing is a balance of daring and caring,” Maud Meijboom-van Wel – Managing Director / CEO, Heineken Lanka Ltd told the forum.

“Why I say daring is, you have to be clear in what you can promise people, when you make promises you have to walk the talk. So with the key talents and everyone you need to have the career and talent conversations.

“I am a bit lucky because I am running a multinational company so my career path goes beyond Sri Lanka so I can say if you acquire certain skills here, then you can move out of here and then come back too, that is a bit easier for me but it starts with having a real open conversation with walking the talk – dare and care.” (Colombo/Dec7/2022)


Continue Reading

Despite losses, Sri Lanka to resume “park & ride” transport after complaints  

ECONOMYNEXT –  Sri Lanka’s state-run Transport Board will resume its loss-making City Bus service from January 15, 2022 Cabinet Spokesman Bandula Gunawardena said, after the service abruptly discontinued with the state-run firm’s director board citing losses.

The City Bus service was introduced in 2021, under the government of former President Gotabaya Rajapaksa, from Makubura to Pettah and Bambalapitiya.

The service was started to reduce the number of automobiles travelling to and from Colombo and suburbs by providing a comfortable, convenient and safe public bus transportation for passengers and riders who use cars and motorcycles as their means of transportation.

During the time period in which the service was initiated, there were 800 hundred vehicles that would be parked and would use the system, Gunawardena, who is also the Transport Minister, said.

The service was later collapsed due to inconsistencies in scheduling and it was completely stopped after

“Without informing the Secretary or the Minister of the relevant Ministry, the Board of Directors have come to a conclusion that this is loss making route and must be halted,” Gunawardena said.

“The users of the City Bus service brought to our notice and therefore I gave the Secretary to the Ministry of Transport the approval to start the City Bus service from January 15.”

“If we stop all loss making transport services then massive inconveniences will occur to the people in far parts of the island.”

The chairman of the state run Ceylon Transport Board has been asked to handover the resignation letter by the Minister Gunawardana citing that the head has failed to implement a policy decision approved by the government. (Colombo/ Dec 06/2022)

Continue Reading

Sri Lanka may see rates falling next year: President

ECONOMYNEXT – Sri Lanka’s interest rates are high and hurting small businesses in particular but interest rates are required to maintain stability, President Ranil Wickremesinghe said.

“One is, all of you want to know what’s going to happen to the interest rates?,” President Wickremesinghe told an economic policy forum organized by the Ceylon Chamber of Commerce.

“I wish I know. The governor has told me that the inflation has peaked. It’s coming down. You all understandably want some relief with the interest rates to carry business on.”

“I understand that and appreciate the viewpoint. It’s not easy to carry business on with such high interest rates. On the other hand, the Central Bank also has to handle the economy. So maybe sometimes early next year we will have a meeting of minds of both these propositions.”

Sri Lanka’s interest rates are currently at around 30 percent but not because the central bank is keeping it up. The central bank’s overnight policy rate is only 15.5 percent but the requirement to finance the budget deficit and roll over debt is keeping rates up.

Rates are also high due to a flaw in the International Monetary Fund’s debt workout framework where there is no early clarity on a whether or not domestic debt will be re-structured.

After previous currency crises, rates come down after an IMF deal is approved and foreign loans resume and confidence in the currency is re-stabilished following a float.

This time however there has been no clear float, though the external sector is largely stable and foreign funding is delayed until a debt re-structure deal is made.

Sri Lanka’s external troubles usually come because the bureaucrats do not believe market rates are correct when credit demand picks up and mis-uses monetary tools given in 1950 by the parliament to suppress rates, blowing the balance of payments apart.

The result of suppressed rates by the central bank are steep spikes in rates to stop the resulting currency crisis.

A reserve collecting central bank has little or no leeway to control interest rates (monetary policy independence) without creating external troubles, which is generally expressed as the ‘impossible trinity of monetary policy objectives’.

However, it has not prevented officials from trying repeatedly to suppress rates, perhaps expecting different results.

After suppressed rates – supposedly to help businesses – trigger currency crises, the normalization combined with a currency collapse leads to impoverishment of the population.

The impoverishment through depreciation leads to a consumption shock, which also leads to revenue losses in businesses.

The suppressed rates then lead to bad loans.

In the 2020/2022 currency crisis the sovereign default has also led to more problems at banks. Several state enterprises also cannot pay back loans.

“…[T]he bad debt that is being carried by the banks is mainly from the private sector or the government sector,” President Wickremesinghe said.

“Keep the government sector aside. We’re dealing with it. How do you handle it? Look, one of our major areas of are the small and medium industries. You can’t allow them to collapse, but they’re in a bad way.”

Classical economists and analysts have called for new laws to block the ability to central bank to suppress rates in the first place so that currency crises and depreciation does not take place in the first place.

Then politicians like Wickremesinghe do not have to take drastic and unpopular measures to fix crises and there will be stability like in East Asia.

Sri Lanka had stability until 1950 when the central bank was created by abolishing an East Asia style currency board. The currency board kept the country relatively stable through two World Wars and a Great Depression.

In 1948 after the war (WWII) was over “we stood second to Japan” Wickremesinghe said.

“But we started destroying it from the sixties and the seventies,” he said. :We started rebuilding an economy, which was affected by a (civil) war, and thereafter the way we went, is best not described here.”

Continue Reading