New LOLC venture to penetrate SME sector
Lanka Orix Leasing Company Plc (LOLC) last week launched its micro
financing arm as a separate venture - LOLC Micro Finance Company Ltd
aimed at deep penetration into the SME sector.
LOLc chairman Rohini Nanayakara, Arno De Vette of the FMO and
senior executive of the LOLC at the launch.
Pic by Saliya Rupasinghe. |
The new venture is a collaboration with the Netherlands Development
Finance Company (FMO), the international development bank of the
Netherlands. LOLC said that this is the first private sector local micro
finance entity in Sri Lanka with foreign equity.
LOLC chairman Rohini Nanayakara said that the LOLC has grown over the
last 28 years as a group of companies providing a range of financial
services. LOLC pioneered in introducing leasing and factoring solutions
to the financial service sector in Sri Lanka which has contributed
significantly towards uplifting the SME sector of the country. "In 2003
we ventured into micro financing and today the business has grown to a
leading agricultural and micro finance solutions provider, Nanayakara
said.
The company started operations by providing solar home systems to
rural households and then expanded its services into agricultural
related financing, dairy farming, three wheeler, tractor and motor-cycle
loans to cater to the increasing demand in the sector.
The launch of this entity will mark the dawn of a new era for the
micro finance industry of Sri Lanka and we are confident that this
partnership will greatly benefit the rural community, she said.
Arno De Vette of the FMO said that micro financing is not a soft
business. It provides money to small enterprises and in the sector risk,
interest rates and overhead costs are high.
The FMO invests in micro financing in emerging markets.Earlier, the
Dutch government owned 51% of the FMO and after the financial crisis the
government share increased to 75%. FMO has invested in risk capital in
companies and financial institutions in developing countries.
FMO's bilateral investment portfolio is about Euro 3.4 billion and is
one of the largest bilateral development banks worldwide.
GW |