With over 40 years of excellence, Kanrich Finance Ltd. is ready to turn a new leaf in the Sri Lankan financial landscape. Over the years, it has helped customers make clear and confident investment choices on how to save, borrow, and manage money for the future. With the vision to be the best in the industry, Kanrish Finance is always a step ahead in providing the best service at all times by meeting customer needs and fulfilling their dreams. Following are excerpts of an interview held with S.H. Piyasiri, Chairman Kanrich Finance. Mr Piyasiri is a professional banker and former General Manager /CEO of the National Savings Bank. He counts over 35 years experience in the banking and finance sector.
Q: Can you tell us about Kanrich Finance?
A: The Company was incorporated in 1971 as a Finance Company and now registered with the Central Bank of Sri Lanka under the Finance Companies Act No 78 of 1988. We are authorized to do all financial functions authorized under the Finance Companies Act. ‘Kanrich’ is a Sinhala word that means ‘everybody’s wish’ and it was developed by Arisen Ahubudu.
Q: What are your plans to take the Kanrich brand to the public?
A: In addition to our head office in Colombo, we have opened three branches in Kandy, Gampaha and Anuradhapura and two service centers in Rathnapura and Wennappuwa. All the district expansion was done in the first quarter of this year. Other than opening branches, we are taking the Kanrich brand to the public by providing a superior service to our customers.
Q: How would you reinvest the public deposits?
A: We are little different from a conventional finance house as we are keen to develop the rural sector. During the recent financial crisis we saw that investors in Colombo and its suburbs were affected badly compared to rural businesses. Also, according to Government policies, we are expected to open new branches in the districts to help the rural masses. The Central Bank of Sri Lanka encourages opening branches especially in the North and East. Some of the branches are now engaged in micro financing. As a pilot project we extended loans to over 1,000 customers in February 2011 and the recovery rates and borrowers’ utilization of these funds were encouraging.
Q: All finance companies are now entering the microfinance sector. So, why enter the micro finance sector instead of conventional business?
A: Finance companies are serving a different sector in the market. Some of these sectors have little access to banking. Sometimes these sectors lack certain important documents which prevent them from accessing funds from banks. While servicing this marginal sector we learnt that the rural sector too needs the help of finance companies. In addition, the recovery rate in micro finance is very high compared to conventional lending.
Q: But aren’t you taking a considerably high risk?
A: The risk we are taking is covered by implementing an appropriate recovery mechanism backed by close relationships with beneficiaries namely relationship banking. When it comes to recoveries finance companies are far better and smarter in recoveries. Before and after providing a credit facility the finance company moves with the customers and maintains close relationships. This helps to monitor customer behavior and keep a close tab on recoveries. In the rural market urgent fund requirements are satisfied by local money lenders. This provides an opportunity for us since we provide far better and guaranteed services compared with local money lenders.
Let me take the Thambuttegama center, which caters to the North Central Province. We started micro financing almost six months back. In the micro finance sector you rarely get willful defaulters. We have modified certain formats in micro financing to provide financial facilities to the rural sector and our model is adapted to suit the Sri Lankan community.
Q: What are your future plans?
A: Plans are underway to further expand our lending activities in collaboration with foreign funding lines, during the current financial year. In the meantime we will be improving the processes of the company by introducing new technology, novel human resource practices and new management techniques. With a view to improving our transparency of operations we will get listed on the Colombo Stock Exchange before the end of June this year.
Source : The Sunday Leader (May 22,2011)