People’s Leasing & Finance: Building on strength in Islamic Finance

“Islamic finance is no longer a concept limited only to Muslims: all over the world, Islamic financial services are being successfully used by banks and other finance institutions to provide services to their clients,” said Senior Manager (Islamic Finance) Mohideen Maharoof of People’s Leasing & Finance PLC (PLC), Sri Lanka’s leading Non-Banking Financial Institution, which maintains a substantial presence in Sri Lanka’s Islamic finance industry. 

“PLC is recognised as one of the country’s leading provider of Islamic financial services. With dedicated branches and Islamic banking windows in almost all parts of the island, PLC’s network of Islamic banking services enables the company to serve multiple customers at many levels, and assures a seamless service throughout the country,” Maharoof added. 

PLC offers a wide range of Sharia-compliant financing options to its customers, the key among these being: 

Ijarah

The Ijarah product is the leasing counterpart & allows the lease of an article for a specified permissible benefit in the form of a usufruct for a specified period in return for a specified consideration.

Murabahah

Murabahah / Trading Murabahah are a Sharia-compliant product that provides short- to medium-term financing, for the purchase of goods /assets. Cost plus financing.

Musharakah

Musharakah is a profit and loss sharing contract based on a partnership, in which parties contribute to the financing and management of a Sharia-compliant project.

Wakala – Finance & Investment

Wakala is a financing arrangement where the financier (Muwakkil) invests an amount of money in the customer’s business, and appoints the customer as an agent (Wakil) to run the business at a pre-agreed profit (anticipated profit).

Mudharabah - savings account

This is a Savings Account that works on the basis of Mudharabah. The minimum investment required for opening an account is Rs. 1,000. 

Mudharabah – Short- and Medium-Term Investment

Mudharabah is a short to medium term deposit product for varying investment periods. Profit is shared on a pre-agreed ratio (PSR). Profit is paid monthly or on maturity, with re-investment option available on a continuous basis.

Usfoor Minor’s Savings Account

This is a unique savings account for minors that offers a good return. The profit is calculated monthly, and credited into the account. The minimum investment required is Rs. 500/=.

Whilst Islamic Financial Solutions are primarily made available to Muslims, there is also the opportunity for those in other communities to use such services and make use of the incentives offered under the same, Maharoof explained. “Within the principles that govern Islamic financial services, there are ethics and principles that must be followed and adhered to, most of which are often beneficial to the customer.”

It was highlighted that some of the world’s biggest financial institutions operate Islamic finance solutions and it provides considerable proportion of funding for infrastructure development. The popularity of Islamic financial services has made it a viable financial option for many. The opportunity for growth in the Islamic financial sector is tremendous, Maharoof pointed out.

As the flagship subsidiary of the state-owned People’s Bank, PLC also is the parent of People’s Insurance PLC, People’s Microfinance Ltd., People’s Leasing Fleet Management Ltd., People’s Leasing Property Development Ltd. and People’s Leasing Havelock Properties Ltd. PLC, being the highest-rated Non-Bank Financial Institution in the country currently enjoys two international ratings: ‘B+/ B’ a rating equal to the Sovereign by Standard & Poor’s and ‘B’  rating a notch below the Sovereign by Fitch Ratings International. PLC also possesses an ‘AA-(lka)’ National Long Term Rating from Fitch Ratings Lanka. PLC has also been on the S&P Sri Lanka 20 Index of the Colombo Stock Exchange (CSE) since 2014. PLC is the strongest player amongst the NBFI category, with an asset base of over Rs. 150 billion. PLC was listed on the main board of the Colombo Stock Exchange (CSE) in November 2011 and is among the 20 largest blue-chip companies on the CSE. In recognition of its outstanding achievements, PLC was ranked 15th in the ‘Business Today Top 30’ ranking. 

PLC is a licensed finance company registered with the Monetary Board of the Central Bank of Sri Lanka.