Commercial Credit: Moving forward with shared values

By Cheranka Mendis

Moving towards success with ethics and values at the fore, Commercial Credit has grown exponentially over the last few years despite challenges both internally and externally. Chief Operating Officer of the company, Shriyantha Perera, joined the Daily FT to talk about the current status of the company and its future plans. Following are excerpts from the interview:

Q: Give us a brief overview about Commercial Credit

A: Commercial Credit is a 30-year-old company which underwent a management change about three years ago. After that, we have experienced exponential growth. At the time, the company was taken over by the new investors and the finance industry was going through a rough patch.  People had lost faith in finance companies.

There was a crisis in the financial services sector, both internationally and locally. The management realised that we could not have the usual philosophy of going out to the market and spending a lot of money in advertising.

We were quite small at that time. Out of about 35 finance companies, we were around the 30th in terms of size. At that time, a decision was made to not spend a lot of money on advertising but to concentrate internally on developing the staff with much emphasis on our shared values, believing that they will then go out and spread the word in the marketplace. That is one of the key differences in Commercial Credit as opposed to other institutions.

Q: What are the five shared values the company abides by?

A: Our first shared value is loving and caring. If you take our annual report for 2012, the title itself is ‘The story of love.’ People have different takes on this. But we are serious about developing this value within the organisation. Second is integrity and trust, third is learning and development, and the fourth and fifth are think win-win, and synergy and teamwork.

These are not just five statements we have made. They are values we talk about day-in and day-out and abide by – whether it is at corporate level or branch level. We also have developed a set of booklets explaining the values in all three languages for use in our internal programs.

Q: What is your current branch network?

A: Commercial Credit is now operating in over 41 locations. We have approval for 57 locations from the Central Bank of Sri Lanka. We have set ourselves the deadline of March this year to achieve the target of having our presence in 57 locations. We are confident that we will be able to achieve this on schedule. We had 26 locations on 31 March 2012 and will more than double that by the end of the current financial year.

Q: What is your current market share like and what is the YoY growth?

A: In the financial year 2011/2012, we grew by almost 100%. Market share is usually defined by total assets for finance companies. Our total assets in March 2011 were Rs. 5.2 million and by March 2012 it grew to Rs. 10.5 million – we doubled our asset base.

In terms of bottom line it was Rs. 60 million for the year ended March 2011 which grew to Rs. 750 million in the financial year 2011/12. In the current year, 2012/13, with the expansion of our branch network, we feel that we have a lot of potential to increase this.

In terms of actual business, we do offer a range of products which includes what other finance companies offer as well as more. For microfinance, we are the market leader with a portfolio of over Rs. 3 billion and a customer base exceeding 120,000. We are also growing quite fast in the pawning and gold loans business which we are developing in the current financial period.

Q: As you said, the industry faced a negative turn three years ago. What were the innovative steps taken by Commercial Credit to come up to the current status in three years?

A: The main focus was also on getting people right. We believe that if we give the right training, guide them and give them the right values, then they will excel in whatever they do.

We have a system of 360 degree evaluation every month for all 1,000+ employees in the company in relation to our shared values. This shows our commitment in furthering these values.

We also have products such as the revolving business loans and educational loans which others are not doing in addition to standard lease and higher purchase. The uniqueness of our products is the speed. In order to do that, we have created a lot of empowerment at the market level with internal marketing and a lot of technical training and development on top of advanced technology. In fact, our IT systems are very solid and we are able to set up a service point at very short notice.

Q: Last year, you won the coveted Service Brand of the Year Award at the SLIM Brand Excellence Awards 2012. This was the first time in the history of the SLIM Awards that a registered finance company has won such an award. What are your thoughts on this?

A: As a company that is not a major spender on marketing, for us to win the award for the Service Brand of the Year is really extraordinary. This is a great achievement and we are very happy. It is an important topic of discussion within the organisation and has boosted the spirits of the employees. Of course, we have also won several other awards for business excellence before and since then too.

Q: In your view, what are the main factors that helped you secure the title?

A: We are in the service sector as a financial services company and our approach has been somewhat different to other companies. Our main focus has been internal marketing. We place a lot of emphasis on our shared values. As mentioned before, we have five shared values in the company and we feel this is a key factor in our success.

Q: Could you share some of your future plans for Commercial Credit?

A: Although we are now the fourth or fifth largest company out of approximately 45 registered finance companies, we are still quite small in terms of market share. All registered finance companies have only some 5% of the total market of the financial services sector taking into account banks etc.

Even with a difficult macroeconomic environment, we still feel that there is potential for growth; hence the opening of new branches. With that we would be substantially covering the island. We will continue with our micro finance portfolio and develop the potential in gold loans. In addition to leasing and higher purchase, we will concentrate on developing these areas, which we feel could help us double our asset base by the end this financial year.