The LOLC Group crossed the trillion rupee mark, with total assets reaching Rs 1.008 tn, as at December 2018. This significant achievement is on account of the Group’s consistently resilient financial sector – both local and international, coupled with its strategic investments in non-financials sectors - Leisure, Plantations, Construction, Healthcare, Trading and Manufacturing.
Group Managing Director of LOLC, Kapila Jayawardena said, “Iit is a great achievement for our Group to cross the trillion mark in total assets. 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.”
Nine months’ post-merger, LOLC Finance PLC (LOFC), the flagship finance company of the Group, together with Commercial Leasing and Finance PLC (CLC) and LOLC Development Finance PLC (LDFC) (formally known as BRAC Lanka Finance PLC), contributed 29% to the total assets with a combined asset base of Rs. 297 Bn. The total lending book of the three finance companies, reached Rs.216Bn while the total interest income reached Rs. 44 bn for the nine months ended December 2018, an increase of 6% compared with the comparative period. The equity of these companies are well above the regulatory requirement. LOFC and CLC are rated A by ICRA, a subsidiary of Moody’s Investors Service. LOLC’s maiden overseas investment, PRASAC Microfinance Institution Limited (PRASAC), the largest microfinance company in Cambodia has made a significant contribution to the Group.
In 2007, LOLC was invited to invest Rs. 62 mn to acquire a 19% stake in PRASAC, a key performer in the dollarised Cambodian economy. This was the first step taken in line with LOLC’s long term vision to propagate its unique business model in microfinance beyond the shores of Sri Lanka.
The value addition of this investment is further reinstated when LOLC increased its holding from 19% to 70% over the years. Today, PRASAC has a lending book of Rs. 354Bn, Rs. 236Bn in deposits, Rs. 435Bn in total assets and a customer base of 400,000. With a staggering profit contribution of Rs. 10Bn (for the nine months ended) to the Group, PRASAC stands strong with LOLC at the helm.
Diversifying its portfolio by expanding regionally has offered LOLC resilience, financial stability and a well spread risk profile, which had enabled the Group to stride ahead with consistent performance even during turbulent times in the local economy. Thus, LOLC rapidly expanded its regional microfinance footprint to Myanmar, Pakistan, Indonesia and Philippines over the years.
In 2014, LOLC Myanmar Microfinance Co., Ltd (LMML) was established as the fourth foreign operator in response to an initiative of the Myanmar regulators. Albeit a greenfield operation, LMML demonstrated remarkable growth - both financially and socially-attracting an array of international funding agencies on board to achieve their development goals.
The Group made its second investment in Cambodia in 2014. LOLC Cambodia Plc. (LOCAM) is the fourth largest microfinance and the second most profitable microfinance institution in Cambodia with an outreach of 236,000 and an asset base of Rs. 112Bn. Today, LOLC holds 97% of LOCAM, a 24-year-old microfinance institution that was first established by an NGO.
In 2017, the Government of Pakistan and the Sultanate of Oman, invited LOLC to take up the major shareholding of their joint venture, Pak Oman Microfinance Bank Limited (PakOman), in recognition of LOLC’s outstanding contribution to the microfinance community. Today, PakOman is rapidly growing to become an important player in Pakistan, an economy with a population of over 200 million.
The Group’s technical expertise in areas such as effective and focused risk management, stringent credit evaluation and fin-tech driven processing, will provide a steadfast hand for Pak Oman in their goal to uplift and empower bottom-of-the-pyramid entrepreneurs. The Group ventured into Indonesia in early 2018, acquiring a controlling interest in PT. Sarana Sumut Ventura (PTSSV). With a population of over 265 million, and more than 40% households classified as “very poor”, the company is poised to accomplish its long-term vision of alleviating poverty by empowering women and micro entrepreneurs.
LOLC concluded 2018 with its investment in Philippines. LOLC ASKI Finance and LOLC Development Bank, both carefully identified for its strategic locations, where the former will penetrate the northern part and the latter with the central and southern part of Philippine archipelagos.