Question (Q): What are LBF’s main sectors in percentage terms?
Answer (A): Today LBF is one of the leading players in the licensed finance companies (LFCs) sector and is estimated to be the second largest in terms of asset base. LBF is fully involved in the financial services sector where we invest in transportation, agriculture, micro finance, trading, manufacturing distribution and tourism. The company’s product portfolio mainly includes deposits, leasing, hire purchase (HP), gold loans, micro finance, factoring and working capital management and Islamic financing.
Leasing and HP carry around 60% of the total lending portfolio and the balance 40% represent Debt Factoring, Mortgage Loans, Gold Loans, Vehicle Loans, etc.
Q: How has LBF increased its deposit base?
A: By now LBF had won the hearts of Sri Lanka’s public because it has proved its strength by way of its outstanding performance and results. Our quality standards and unparalleled results are being always justified by our bottom line. At the end of the day depositors too have been enabled to reap the benefits of the company.
Q: How much is your deposit base now?
A: Currently the deposit base has surpassed Rs. 33 billion.
Q: How many branches do you have?
A: Expansion of our reach opens the doors for unlimited opportunities when reaching customers. We have 121 distribution channels of which 86 operate as fully fledged branches.
Q: How much of market share of finance company business do you estimate is for LBF?
A: Market share of 13% in terms of asset base.
Q: What is LBF’s commitment for the development of the country’s financial sector?
A: The company has a habit of continuing innovation in designing new financial tools which it has done during the last few years. At the same time we do try to make disciplined effective financial policies such as credit criteria processes and control systems. Our expansion into the North and East occurred within weeks after the end of the conflict, hence our presence undoubtedly contributes to activate livelihood initiatives and bring these war-torn areas into the mainstream of development.
Q: Do you have exposure to agribusiness? How much of the company’s business is aimed at that sector?
A: The company provides financial assistance to customers engaged in sectors such as agriculture and fisheries which are exposed to changes in the climate. Considering these factors we have designed a special repayment model for such customers who are exposed to adverse results arising from climate change.
Q: Can you state your plans and successes to date regarding LBF’s presence in the former conflict areas?
A: The rapid expansion of our distribution channels which includes branches and gold loan centres saw the largest expansion drive in 2011/2012 in the LFC sector with a total of 20 new distribution channels opened across the country. The company also recorded another first by opening 10 distribution channels; the highest number to be opened within a single day. Four of the 10 channels were opened in the North and East (NE) reflecting the high growth potential which we have identified in the backdrop of the post war economic revival that is taking place in these areas. The company recruited more than 150 for the distribution channels in NE who were deprived of most necessities due to the prolong war.
Q: Why does a customer choose a finance company over a traditional bank?
A: What we believe is the service provider should go to the customer. Thus our distribution channels take all our products to the very doorstep of every community across the nation. That is why we are vigilant and keen in assessing customer requirements within a short period of time.
Q: It appears from a layman’s point of view that there is very little money in people’s pockets. In that context how are your loans performing? What level is bad debt at?
A: It’s not how you manage your company, it’s how you advice customers. We have a customer base that comes from a very sound financial background. Therefore the customer is in a position to face any fluctuations that arise from their financial position. Due to the strategy of maintaining high quality portfolio, we are able to manage the non-performing loan ratio below the industry average.
Q: What plans do you have for expansion of LBF?
A: LBF believes that there is no end to expansion. But when expanding we are mindful “and sustainable” since our expansion process is steady and manageable.
Q: What are the positive aspects you see in the last budget?
A: Since there were no major changes in the tax regime or policies, we are optimistic that the year ahead is “challenging” and fruitful.
Q: Would you as a banker have liked to see some “better” incentives? If so what are those?
A: We value a higher depreciation allowance for equipment and machinery which we lease to customers engaged in sectors such as agriculture and fisheries as a concession from the budget.
Q: Where in the market do you see LBF in four years time?
A: We have a dream of being South Asia’s no 1 “financial supermarket” and we are confident that we shall break new frontiers in the financial services sector. We have already identified a few locations overseas to open up distribution channels. Thus now we follow a concept of “One Stop Shop” that meets diverse financial requirements of customers of all age groups.
Q: Why do you believe LBF is as successful as you state? What difference has LBF made to the customer who seeks the services of a finance company?
A: I strongly believe in practical solutions rather than theories. At the same time I believe you can’t deliver practical solutions if you do not know your theories and basics. “World’s best batsmen speak with their bats.” Similarly our innovative timely strategies have made customers comfortable. That is why even with a competitive environment LBF has won the hearts of all Sri Lankans.
Q: How positive are you about Sri Lanka’s economy?
A: I personally as a principle do not grumble about factors beyond my control, however I am positive about my company’s and the country’s future as my nature and habit are facing challenges and to be optimistic.
(firstname.lastname@example.org) (Pics: mediacolombo/Chanaka Ratnaweera)