Thursday, 10 October 2013 00:00
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Third largest private sector player HNB is setting up a finance company to carry out micro finance business.
The Central Bank has permitted HNB to set up the proposed company initially as a fully owned subsidiary. HNB is proposing to tie up with prospective international investors in time to come.
All existing assets and liabilities relating to microfinance smallholder agriculture financing of HNB would be transferred to the new entity subject to regulatory approvals.
HNB said it has been involved in rural development and agriculture financing from its inception as a fully-fledged commercial bank and has been providing financial services to rural Sri Lanka for commercial activities at micro, small and medium level encompassing agriculture, animal husbandry, dairy development, trading and small industries over the decades.
Due to large unemployment and under employment and economic disparities and following the countrywide youth unrest experienced in the country during 1988-1989, HNB took the initiative to create a program under the brand name ‘Gami Pubuduwa’ to enhance financial inclusion in rural Sri Lanka in general and youth inclusion in particular.
The Gami Pududuwa rural agri lending micro financing program over the past two decades has gained local and international recognition as one of the best means of down scaling commercial banking to create greater financial inclusion.
Over the last 20 years, HNB has disbursed loans totalling to over Rs. 27 billion for over 150,000 micro entrepreneurs across the country apart from small and medium agriculture lending, which is very significant.
Under the Gami Puduwa, HNB has created programs, initiatives and products to cover the children, youth, migrant workers, women, development of smallholder farmers, farmer entrepreneurs by offering tailor made financial solutions in most provinces and also the north and east since late 2009.
HNB has now decided to spin off its small agriculture finance and micro finance program and operations into a separate financial entity to provide specialised services with a clear focus to reach millions and enhance access to financial services at affordable prices.
