Resilience and success: HNB Finance’s journey towards sustainable growth amidst adversity

HNB Finance MD/CEO 

Chaminda Prabhath 

In an exclusive interview with HNB Finance Managing Director and Chief Executive Officer Chaminda Prabhath, we delve into the company’s remarkable ability to overcome challenges and drive growth in the Sri Lankan financial sector. Despite navigating difficult times, HNB Finance has demonstrated resilience and a positive growth trajectory. With a strong commitment to supporting micro, small, and medium enterprises (MSMEs) and leasing customers, the company has implemented effective strategies to expand its asset base, improve its portfolio, increase branches, and introduce new products. Join us as we explore their achievements, goals, and the bright future that lies ahead.

Q: Despite facing market challenges, how has HNB Finance managed to maintain its resilience and achieve a positive growth trajectory?

A: HNB Finance has displayed unwavering resilience amidst market challenges, positioning itself for sustained growth. In the financial year 2021-22, we achieved profitability, signalling our ability to adapt and thrive. Although the subsequent year, 2022-23, presented certain hurdles, we are confident in our ability to rectify these losses and generate even greater profits in 2023-24. We have made significant improvements in our total asset base which saw 29.38% growth, portfolio which saw 21.18% growth, 38.43% of deposit base growth and also introduced eight new branches to our branch network. All of this coupled with our new and improved product offerings set a strong foundation for success. Our ability to adapt and innovate, coupled with our steadfast commitment to customer-centric solutions, has been pivotal in our journey.

Q: Can you elaborate on the measures taken by HNB Finance to support and empower MSMEs and leasing customers?

A: At HNB Finance, empowering MSMEs and leasing customers lies at the core of our business strategy. We have disbursed over Rs. 13 billion in microfinance loans, supporting the government’s vision of uplifting the bottom of the pyramid. This lending has not only positively impacted the lives of numerous entrepreneurs but has also fuelled our growth. Moreover, we have expanded our asset base, improved our portfolio performance, increased our branch network to provide greater accessibility, and introduced new products tailored to the unique needs of MSMEs and leasing customers.

Notably, our innovative gold loan products, such as Gold Loan, Gold Plan, and VIP Gold Loan, offer some of the industry’s best values for gold at the lowest rates. These efforts have been instrumental in driving our growth and solidifying our position in the market.

Q: How has HNB Finance effectively managed the impact of interest costs and the borrowing portfolio on its bottom line?

A: Managing interest costs and optimising our borrowing portfolio has been a strategic focus for HNB Finance. We have proactively taken steps to reduce interest costs, resulting in improved financial performance. Our disciplined approach to risk management and prudent financial planning has enabled us to strike a balance between maximising profitability and providing competitive lending rates to our valued customers. By closely monitoring interest rate fluctuations and making astute decisions, we have safeguarded our bottom line while delivering sustainable value to our stakeholders. Through prudent financial planning and robust risk management practices, we have successfully turned a profit in the last quarter of the previous financial year. We remain steadfast in our efforts to further enhance profitability in the upcoming quarters.

Q: Looking ahead, what are your speculations regarding the future economic stability of Sri Lanka?

A: We are cautiously optimistic about the future economic stability of Sri Lanka. The government’s proactive measures and significant investments in the country’s infrastructure have laid a strong foundation for sustainable growth. In the recent past, Sri Lanka has experienced an appreciation of its currency. This positive shift, coupled with initiatives such as the privatisation of key sectors and effective inflation control, provides an encouraging backdrop for businesses to thrive and economic activities to flourish. As a financial institution, HNB Finance is well-positioned to contribute to the economic stability and growth of the country by providing essential lending services and supporting businesses across various sectors.

Q: How has HNB Finance contributed to the overall economic recovery and growth in Sri Lanka?

A: HNB Finance has played a pivotal role in driving economic recovery and fostering growth in Sri Lanka. Our focus on innovation and expansion is closely aligned with Sri Lanka’s economic progress and the evolving needs of businesses. By disbursing substantial amounts of microfinance loans, we have directly contributed to the growth and sustainability of MSMEs. Moreover, we have extended our reach to rural communities, emphasising the importance of financial empowerment at the grassroots level. As the country’s stability improves and import restrictions are gradually eased, HNB Finance is well-positioned to provide essential lending services, thereby fuelling economic activities and nurturing fast-growing industries, including the construction sector, which are integral to the country’s overall growth and development. Our continuous introduction of new products, enhancement of digital capabilities, and expansion of our branch network further support the government’s vision for a thriving economy, where access to tailored financial solutions is crucial for sustainable growth.

In conclusion, HNB Finance’s journey towards sustainable growth amidst adversity showcases its resilience and dedication to empowering businesses and fuelling economic recovery in Sri Lanka. Through strategic measures, support for MSMEs and leasing customers, and a focus on innovation, the company has established itself as a key player in the financial sector. With a positive growth trajectory and a commitment to delivering customer-centric solutions, HNB Finance is well-positioned for future success.