LB Finance partners WEBXPAY to promote ‘CIM’ business loans to MSMEs

LB Finance Managing Director Sumith Adhihetty (3rd from right) with WEBXPAY Chief Executive Officer Omar Sahib exchanging the MoU. Others, from left: LB Finance AGM Legal Wickrama Punchihewa, WEBEXPAY Director Business Development and Operation Krishan Samarasinghe, LB Finance Deputy Managing Director Niroshan Udage and DGM – Strategy & Digital Finance Bimal Perera

Strengthening its commitment towards extending affordable access to working capital among the MSMEs (Micro, Small and Medium Enterprises), LB Finance (LBF) recently entered into a Memorandum of Understanding (MoU) with WEBXPAY Ltd., a leading provider of SaaS based digital payments solutions to MSMEs, to jointly promote the company’s latest digital working capital product – CIM Business Loan.

The partnership marks an important step towards LBF becoming a leading player offering digitally powered credit solutions to MSMEs. In the vastly evolving country’s digital financial services landscape, the company understands the importance of working in collaboration with leading fintech players towards realising their common goal, ‘digital financial inclusivity’.

Under the agreement LBF and WEBXPAY will work together to popularise the concept of gaining access to credit on the strength of digital transactions.

CIM Business Loan (CBL) is a pioneering digital loan product launched by LBF giving the MSME entrepreneurs the vital access to a flexible and a highly affordable working capital finding. The uniqueness of CBL is that its credit evaluation is purely based on the assessment of business cash flows as opposed to conventional method of requesting the borrowing entity/entrepreneur to pledge movable or immovable assets as collateral. In that context, MSMEs who have digital transactions to validate their business inflows stand a greater chance of becoming eligible for loans.

As per the last available statistics (2013), the MSME sector in Sri Lanka accounts for 90% of all businesses in the country, provides 45% of employment, and contributes 52% to the nation’s GDP. Successive Sri Lankan governments have thus correctly identified the importance of MSMEs as one of the main drivers of growth and development. However, this sector continues to be one of the most neglected segments for accessing credit from the formal financial institutions for the lack of collateral. LBF believes the increasing trend of digital payment adoption among the MSMEs could be a gamechanger in solving this chronic problem provided the financial institutions develop agile products and work in partnership with fintech companies to share technology, data, insights and know-how.

Speaking on LBF’s approach towards technology lending solutions, Managing Director Sumith Adhihetty said: “As a leader with over five decades expertise in the Sri Lankan financial services industry, we strongly believe that systemic issues that have kept away the formal sector financial institutions from helping the MSMEs can only be overcome through innovation and collaboration. We are very pleased to work with WEBXPAY, an emerging force in the digital payments space to collectively explore ways to help the entrepreneurs seeking for working capital and encourage them to adopt digital transactions. Our business loan product is unique, and its pioneering automated loan recovery mechanism powered by LB CIM App makes it extremely convenient to the borrower and cost efficient to the company.”

Speaking on the partnership with LBF, WEBXPAY Chief Executive Officer Omar Sahib said: “As a leading fintech specialising in affordable digital payments solutions to MSMEs, our company has been actively looking at ways to enhance the value proposition to our merchants. Partnerships with LBF gives us a unique opportunity to offer an extremely affordable working capital loan to our customers bringing a complete digital financial solution to their business. Opportunity to avail the CIM business loan will encourage our merchants to increase digital transactions using our state-of-the-art digital payment aggregator solution. Our solution offers the widest array of payment options ranging from globally accepted cards, digital wallets and mobile money payments from over 15 operators, all in one solution.”

CIM Business Loan is powered by the LB CIM (Cash-In-Mobile) Business App, a smartphone based mobile wallet solution, built for the benefit of MSME entrepreneurs. LB CIM is available for both Android & IOS devices, and comes in the form of two separate mobile applications – ‘CIM customer App’ and ‘CIM Business App’ – to cater to the specific needs of customers and merchants.