L B Finance PLC’s overseas foray has borne fruit with the company successfully securing a licence to run a microfinance business in the southern central part of Myanmar, which is slowly opening up after decades of military rule.
L B Finance, a non-bank lender with an asset base of Rs.109 billion, last week said it received license on October 10 to engage in microfinance business in the Bago Region of the Republic of the Union of Myanmar.
Bago Region is an independent administrative region in the southern central part of Myanmar with a population of 5 million.
The 39, 400 square kilometre area is predominantly an agricultural region where rice is grown as the major crop but the region’s economy largely depends on timber trade.
Other major crops include betel nut, sugarcane, maize, groundnut, sesamum, sunflower, beans and pulses, cotton, jute, rubber, tobacco, tapioca, banana, Nipa palm and toddy.
L B Finance has set up a 99 percent owned subsidiary, L B Microfinance Myanmar Company Limited, and will commence operations before March 31, 2018, the company said in a disclosure to the Colombo Stock Exchange.
L B Finance is the second non-bank lender with a Sri Lankan origin to set up business operations in Myanmar after Lanka Orix Leasing Company PLC commenced microfinance as a greenfield operation in 2013.
In 2015, Sampath Bank PLC and Commercial Bank of Ceylon PLC set up representative offices in Yangon, the largest city and former capital of Myanmar.
Sri Lankan banks and established non-bank finance companies with balance sheet strength have been for sometime seeking cross border growth opportunities as the domestic market is reaching saturation.
Apart from banks and finance companies, top local FMCG player, Hemas PLC, has also entered Myanmar for pharmaceutical distribution operations.