By Duruthu Edirimuni Chandrasekera
With the South Asian, and African markets under its belt, the LOLC Group – Sri Lanka’s most profitable conglomerate – has set its sights on investments in the former Soviet states, officials said.
“We are exploring opportunities in the financial space in countries like Uzbekistan, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan etc.,” an official told the Business Times on Wednesday. He said that the economic growth in most of these nations is linked to the growth of medium, small and micro enterprises (MSMEs) in three important sectors of the economy – trade and services, transportation, and agriculture. Increased awareness of the underestimated role of MSMEs in the production of agricultural exports may contribute to the revitalisation of agricultural growth within the context of limited natural and financial resources, he said.
LOLC’s financial services footprint now stretches across Cambodia, Myanmar – the two countries it initially forayed into while Pakistan, Philippines, Indonesia, Nigeria, and Zambia were within the past four years.
In 2017, LOLC ventured into Pakistan by investing in Pak Oman Microfinance Bank (POMB), a joint venture with the Islamic Republic of Pakistan and the Sultanate of Oman, into Indonesia in 2018, acquiring the controlling interest in PT Sarana Sumut Ventura (SSV), and a year later invested in the Philippines through LOLC ASKI Finance and LOLC Bank Philippines – a thrift bank. Last year it made its first finance sector investment in the African region by acquiring a controlling stake of FinaTrust Microfinance Bank in Nigeria – a West African nation while starting operations in Zambia by incorporating LOLC Finance Zambia as a greenfield operation – which operates through six branches.
The LOLC Group is easily the most successful at imprinting its mark on foreign soil and flying the Sri Lankan flag. They bought into PRASAC, the Cambodian microfinance firm in 2007 with an 18 per cent stake at the invitation of FMO the Nederland Government’s Development Finance Company, Belgian Investment Company for Developing Countries, and Dragon Capital. In less than a decade the company raised the holding by 52 percent. Then in a US$ 603 million deal in April, LOLC Group sold 70 per cent of PRASAC, the largest micro-finance company in Cambodia to Kookmin Bank.
Their global expansion strategy for the financial services sector in Africa remains a key focus, with plans being made for expanding into more markets, the official added.
LOLC Cambodia is the fourth-largest microfinance institution in terms of portfolio size. LOLC Myanmar is the fourth-largest microfinance institution among 174 market players in the country in just over five years of operation. LOLC Indonesia has grown to 20 branches in the regions of Java and Sumatra Islands. LOLC Bank Philippines incorporated as Inte-Asia Development Bank(IADB) aims to serve the strategic objective of financial empowerment and inclusive social responsibility by empowering women and micro-entrepreneurs, with LOLC replicating its function as a catalyst in inclusive, sustainable development.