LOLC to foray into Indonesia/ Philippines in micro financing

Having inked a joint venture with Pak Oman Microfinance Bank Ltd of Pakistan early this year, the LOLC Group has plans to foray into Indonesia next year and Philippines thereafter, through acquisitions, according to officials.

A LOLC official told the Business Times that LOLC will invest in a microfinance entity in Indonesia by next year and plans are on for the Philippines too. Microfinance is a general term to describe financial services, such as loans, savings, insurance and fund transfers to entrepreneurs, small businesses and individuals who lack access to traditional banking services.

LOLC already has microfinance businesses in Sri Lanka, Myanmar and Cambodia. Some 60 per cent of LOLC profits are from Sri Lanka.

Pak Oman Microfinance Bank Ltd which is a joint venture between Pakistan and Oman invited LOLC to take a majority stake (51 per cent) in their microfinance venture and through its new partnership with LOLC early this year. Pak Oman Microfinance Bank hopes to capitalise on LOLC’s microfinance model which keeps transforming and enabling micro businesses to become small and medium level enterprises through sustainable industrialisation. The idea behind microfinance is to empower borrowers by helping them build a business which can create income and grow.

Pak Oman Microfinance Bank has been offering a range of micro credit and micro savings products and services to the people of Pakistan, since its inception in May 2006. In Sri Lanka, LOLC’s microfinance model has made remarkable progress within a short span of time and is successfully steered by four LOLC Group companies, namely, LOLC Micro Credit Ltd, LOLC Finance PLC, BRAC Lanka Finance PLC and Commercial Leasing and Finance PLC.

LOLC’s maiden international investment, PRASAC Microfinance institution, is currently Cambodia’s largest microfinance institution, providing access to financial services to rural communities.

LOLC began to reap the dividends of its strategic initiatives of expanding its footprint overseas, in the Asian region, according to the official. “Our strategic investments into non-financial sectors such as leisure, plantations, construction, health care and trading and manufacturing also complement the growth in the financial sector.” He noted that the group also aims to expand investments in industries in identified growth sectors such as healthcare and leisure and also invest in new industries.