Prime Grameen unveils new products to support the deserving   

By Cheranka Mendis

In an attempt to serve approximately 1.9 million people who are entitled to microfinance loans in Sri Lanka and to empower the deserving rural populace of the country, Sri Lanka’s flagship microfinance operator, Prime Grameen Micro Finance Limited, has introduced a new set of products to its portfolio.

Having grown its customer base from virtually nothing to 125,000 within two years, Prime Grameen aims to help uplift lifestyles throughout the country. Through the launch of ‘Sip Saviya’, a minor’s savings account, and ‘Gewal Idam Waram’, a fixed deposit scheme, the finance company has addressed two key needs of society.

An account specially designed to help and fund the higher education of young students selected to state universities, ‘Sip Saviya’ will help bright students attain a brighter future.

Speaking to the Daily FT, Prime Grameen CEO/Director B.M.D.C. Prabhath stated that due to financial constraints, a large number of students who are otherwise entitled to go to university for higher education have to forgo this because their parents cannot afford incidental expenses. “We believe that education is key for the future development of the country as well as for individuals. There is a noticeable need for such a product in today’s world.”

A first in Sri Lanka, the specialised minor’s savings account operates by a depositor putting down a onetime payment of Rs. 5,000 made in the name of a child before attaining the age of eight, or Rs. 7,500 made in the name of a child between the ages of five to eight. The child will then receive a monthly return of Rs. 10,000 continuously for three years during the time of his/her university education after completion of the A/L examination. However, if the student fails to enter university, then those students can collect the interest they have earned throughout the years and benefit from it.

If a onetime payment of Rs. 10,000 is deposited for a child between the ages of one to eight, or Rs. 15,000 for a child between the ages five and eight, they will receive Rs.20,000 per month for three years to continue their education. “This is a national service and we are very proud to initiate this,” Prabhath said.

The fixed deposit scheme ‘Gewal Idam Waram’ has been created to award a house worth Rs. 6.5 million from the Prime Lands Housing Scheme in Athurugiriya to a lucky winner from a raffle draw from those who have held a fixed deposit of Rs. 25,000 for a year. Concessionary prizes of two parcels of land worth Rs. 1.5 million each will be given to two other raffle draw winners.

With Prime Lands Ltd. being the parent company of the microfinance company, ‘Gewal Idam Waram’ is an attempt to synergise the two companies in order to offer greater value addition and benefits to their depositors, he said.

Even though the company follows the world famous Grameen concept pioneered by Prof. Yunus, they have adapted it to cater to domestic conditions, he explained, adding that the company has a number of products in the areas of microfinance, loans, savings and deposits.

The ‘Mulasie’ saving scheme for women is such a product. Introduced to support women entrepreneurs, Prime Grameen has close to 85,000 depositors under the scheme. “We want to help them grow their businesses and save from their profit without using it all up.”

Its core business remains in the field of micro financing and he stated that the company gives micro loans of Rs. 25,000, which is gradually increased when the member repays it within the given time. “Our success rate in this is 100%. Our NPL rate is very low, less than 1%, and we have found that they are good pay masters.” Members who have acquired micro loans for their business also receive advice and guidelines to further drive their businesses forward.

Speaking of the company and its progress, Prabhath recalled that previously acquired by Ceylinco Group, Grameen was taken over by major real estate agent Prime Lands in 2011. Having built up a depositor base of 125,000 people, Prime Grameen has lent Rs. 8 billion over the past two years.

It operates through 48 registered fully fledged branches around the country with a strong presence in the North and East and has two service centres in Kalamunai and Balangoda. “Our main focus is to improve the saving habit of the people and to help them attain business success,” Prabhath said.

Prime Grameen has equity capital worth Rs. 700 million. By March 2013, Prime Grameen grew its income by 157%, net profit by 410% and increased its customer base by 36% and depositor base by 60%.

The target is to grow the deposit base by 150% by during the current financial year. “We are looking at diversifying and moving into the areas of micro leasing and land finance as well,” Prabhath said. “We also want to increase our branch network to 75 within the next two years.”