With the encouraging success rate of its pilot microfinance business in the rural areas of Tambuttegama in Anuradhapura district
A team of microfinance professionals at Kanrich Finance, is assessing villages in the North Central province covering Thabuttegama, Galgamuwa, Galewela, Talawa, Migalewa ,Kekirawa,Eppawala and Rajanganaya where the company plans to provide this service shortly. Depending on the ongoing assessment loans up to Rs 25000/ per individual will be granted initially and the amount will gradually be extended up to Rs 100,000 based on the success of the beneficiary projects. Under the pilot project the company had extended loans to over 500 customers as on Feb, 2011. The company maintains a recovery rate of over 95% in line with the global average for the microfinance business.
Outcome of pilot project
“We are extremely happy with the growth of our microfinance pilot project and we will very soon be present in almost every corner in North Central Province,” said S.H.Piyasiri, Chairman,Kanrih Finance. Microfinance, is banking the unbendable, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral. This prompts the Kanrich to enter into this operation to serve this segment of population in Sri Lanka who are unable to get microfinance facilities from the conventional banking sector.
The registered-finance-company (RFC) sector has been gradually recovering from the weakened economic climate that prevailed in 2008 and 2009, and the confidence crisis triggered by the fall of unregulated finance operations. As opposed to the previous financial years, registered finance companies showed acceleration in loan growth across the industry, supported by the opportunities of the post-war era and the more favourable macroeconomic conditions.
The microfinance sector in Sri Lanka has gained a considerable level of maturity over the years. As a result, diverse types of institutions providing microfinance services including co-operative societies, commercial banks, development banks, Non-governmental Organizations (NGOs) and International NGOs . There was a sharp increase in the latter varieties after the Tsunami in December 2004. The institutions providing microfinance facilities are subject to prudential or non-prudential regulations according to the nature of their establishment. The registered finance companies are governed by the regulatory framework of the Central Bank of Sri Lanka
Kanrich Finance Ltd is a registered finance company with the Central Bank of Sri Lanka under the Finance Companies Act No 78 of 1988. Dhammika Siriwardana, CEO Kanrich Finance, explains that “providing microfinance to the needy people and bringing them into our customer base is vital for the success of the company.” He also added that this service will be extended to other districts as well through the newly opened branches.
Source : Daily Mirror and microfinanceafrica.net (March 25, 2011)