Lankan Alliance Finance to lend to street vendors

Non-bank financial institution (NBFI) Lankan Alliance Finance Limited will disburse loans to marginal businesses such as tea and jhalmuri vendors by using mobile financial services.

To run this service, the joint venture company established by a Sri Lankan state-owned bank and local investors will set up a digital platform using mobile applications.

For this purpose, it will sign an agreement with a foreign software firm as soon as possible.

People's Leasing Investment PLC, a subsidiary of People's Bank, the largest state-owned bank of Sri Lanka, owns a 51% share in the NBFI.

Kazi Nasim Ahmed, chief operating officer of the company, said, "It is a big challenge for us as most of the marginal businesses do not maintain any formal shape. But to the country's economy, marginal businesses contribute a portion that is not negligible."

He also said that the marginal businessmen are not eligible to get a loan from financial institutions or banks in a formal way. They receive loans at high-interest rates from local moneylenders and repay the high-cost credit in due time.

"So, we have an initial plan to lend Tk1,000 to Tk20,000 every vendor," he added.

As part of the celebration of three years of its journey, Lankan Alliance Finance arranged a press conference at a city hotel on Thursday.

In the briefing, the non-bank financial institution announced that it will enter the capital market through an initial public offering within the next three years.

Kanti Kumar Shah, chief executive officer of the company, said, "In three years of the journey, our main achievement is that we have no default loan. Our loan portfolio is Tk250 crore."

He claimed that Lankan Alliance Finance is the only NBFI in the country which has no default loan.

Jowher Rizvi, chairman of the company, said that this has been possible because the company has a world-class risk management system.

"Our officials run the business professionally."