There is a silent but visible revolution taking place at the grassroots level in Sri Lanka. Some 75,000 women have been financially empowered and are expanding their entrepreneurship skills, whilst uplifting their lives and giving hope to their families for a brighter future. The entity behind this significant transformation is Nation Lanka Finance (NLF), a finance company licensed and regulated by the Central Bank of Sri Lanka with a rich heritage of 28 years.
The innovative finance company launched its microfinance operation as recently as 2011, with a team of four employees, which has now swelled to 275 employees, having serviced 260,000 customers across the length and breadth of the island. The team is manned by experienced microfinance professionals who have extensive experience in this realm.
Although microfinance is widely acknowledged as a vital instrument in poverty alleviation, NLF has gone one step further and customized its microfinance product to actually address the needs of every single customer, thereby ensuring that the access to finance that it provides grows the customer’s business in a tangible manner and has a far-reaching impact.
NLF CEO Jayantha Perera explained, “The small and medium enterprises or SMEs are the backbone of the economy - and by empowering these diverse small-scale and cottage industries, our company is playing a vital role in elevating the lives of people at the grassroots level. The customers access our micro loans for setting up grocery shops, producing food items and so on, which are vital services in rural and urban settings.
Hence, NLF is proud to be driving the spirit of entrepreneurship in the country. The sheer number of loans being accessed around the country from us demonstrates that our microfinance instrument has given this segment just the boost they needed to brighten their tomorrows. Our microfinance portfolio posted an exceptional growth of 108 percent in the 2014/15 financial year, in comparison to the previous year, growing by over Rs.1 billion.”
Apart from the economic benefits derived by the beneficiaries, the assistance by the company has also enhanced their social status in society, which spurs them to further grow their small businesses. By ensuring that the funds are meant for small entrepreneurs with existing businesses and not as personal loans, NLF monitors the funds to see that they are spent in a responsible manner and for purposes of enhancing the business, informed Perera.
“Our microfinance brand, ‘Dinawamu Lanka’, is ensuring greater financial inclusion and empowering the female population of Sri Lanka to enhance their presence in the country’s workforce. By strengthening them economically, NLF is also promoting gender equality while assisting these capable entrepreneurs to dream big. There are times when we help them see future possibilities for expansion and show them the path to achieve their true potential, which gives us the greatest joy,” added Perera.
A female customer from Negombo commented on her association with NLF. “I obtained a loan of Rs.35,000 from NLF in order to expand my dried fish business in Negombo. I have since obtained and repaid a Rs.75,000 loan and am now repaying a third loan of Rs.200,000. Today, I earn well and enjoy good profits from my business. I owe my family’s and my success to NLF. The best part of dealing with NLF is the ease of obtaining loans with a minimum of paperwork, unlike other companies I have tried in the past.”
NLF has built its reputation on strong connections with local communities. Geared with a presence in 25 locations throughout Sri Lanka, the company is well placed to support communities across the country.
NLF General Manager Microfinance Pradeep Balasuriya explained, “We invested a significant amount of time to research and study traditional microfinance models before we devised our own unique microfinance model. Our objective was to have a structured microfinance instrument that would go beyond merely disbursing funds. We wanted to remain engaged with our customers and towards this end we also provide credit plus services such as financial management training and technical guidance, to witness first-hand the lasting impact of our intervention.
Microfinance is not only a business operation at NLF; it is our commitment for providing a sustainable future for the poorest of the poor in our country. Our strategy is built around our customers, placing them at the centre of everything we do and helping them realize their true potential.”
More significantly, the microfinance team is passionate and driven by the socially responsible mandate of their job. This has necessitated recruiting individuals with a strong sense of responsibility and commitment, and training them under the theme of ‘One Team-One Focus’. This strong grounding in the vision, mission and values of the company has set them on the right path to transforming lives at the grassroots level and helped to uplift the SME sector.
A customer from Trincomalee enthused, “I sought a loan of Rs.35,000 from NLF in order to expand my tailoring business in Trincomalee, which I was granted speedily. Thanks to the loan, I was able to buy a sewing machine. Under the guidance of NLF, I paid my first one-year loan of Rs.35,000 within just nine months. Then I took a second loan of Rs.45,000. Now I have moved to my own new shop building and commenced selling readymade clothes along with tailoring services. I have obtained a loan of Rs.200,000 to further upgrade my shop. I now have a good customer base and goodwill in the area. NLF helped me realize my dream.”
Internal efficiencies have been further enhanced with the implementation of an integrated ERP system, which will contribute towards the improvement of oversight mechanisms and also support strategic decision-making. The company’s presence in 25 locations covers close to 85 percent of the geographical extent of the country. Apart from offering greater accessibility to its services, staff members from these locations make weekly visits to customers in an effort to monitor their progress and provide support, whilst also ensuring their financial commitments are met. The company plans to expand its presence in the upcountry region, as well as in Ampara, Moneragala and in the Eastern Province in the coming calendar year.
“NLF is cognizant of the fact that besides merely offering microfinance at the grassroots level, we are also ushering this segment into the mainstream and inculcating the savings habit. Many of our customers do not have bank accounts. By bringing the unbanked into the financial mainstream, we are able to grow our customers’ financial standing by offering financial management training and advice. We look at forging long-term bonds with each of our customers,” said Balasuriya.
The company is on a strong growth trajectory and its microfinance arm, which contributes nearly 55 percent to company revenues, is showing strong potential for growth. The passion and dedication that the microfinance team exhibits goes beyond the norm. This passion is in turn reciprocated by the company’s customer base, which reflects an above industry 97 percent repayment record, thereby enabling the company to record a favourable non-performing loans portfolio. Instead, the team aims to see that their operations have had a sustainable impact on every customer and enhanced their lives and livelihoods.
In all of its endeavours, NLF will remain dedicated to serving the country and its people, by continuing to offer a diversified range of practical finance products and services, in an efficient, ethical and professional manner. NLF is licensed and regulated by the Central Bank of Sri Lanka and has a rich heritage extending over 28 years. The company has built its reputation on strong connections with local communities and stakeholders.