Multi Finance to get into FinTech tools

Multi Finance PLC is cottoning onto FinTech tools, the new technology and innovation that aims to compete with traditional financial services, officials say.

This decision was taken as FinTech or financial technology is swiftly gaining ground with consumers as a more reachable substitute to traditional payment and banking systems offered by financial firms, they say.

“FinTech is the financial technology that describes an emerging financial services sector in the 21st century. We want an approach that is software- driven in order to improve processes for financial services including lending, borrowing, investing, etc,” Imal Fonseka, Group CEO Fairway Holdings of which Multi Finance is a subsidiary, told the Business Times.

Fairway Holdings, with main business interests in real estate has bailed out Multi Finance PLC, a former Entrust Group Company that was in a bad financial shape with the aim to start lease financing for their apartment business in 2017. Entrust was its parent company which was a part of the Ceylinco Group ( at the time Ceylinco Sriram) which collapsed in 2008, and is being investigated over irregularities by the CID and the Police with Central Bank (CB) carrying out their own probes.

Mr. Fonseka added that theirs is not a brick and mortar approach and they will aggressively pursue new technology to broaden their customer base. “We have identified tools that will enable faster credit evaluations that will assist customers to know the status of their credit applications. We also want to carry out online transactions so that customers will not need to visit branches.” He added that Fintech is the new tech- nology and innovation that aims to compete with traditional financial methods in the delivery of financial services. “As new FinTech tools and software emerge to disrupt the traditional model, financial services are improving, posing greater efficiency, speed and accountability.”

In a bid to carry out all this and to bring about a sturdy balance sheet, the Colombo Stock Exchange- listed Multi Finance will raise Rs. 200 million at Rs. 13 per share which is around the net asset value of the company. In a stock exchange announcement released recently, the company said that the purpose of raising capital is to meet the core capital requirement of Rs. 1 billion in terms of section 3.2 of the Finance Companies Direction No. 1 of 2013 to comply with the Finance Companies minimum core capital direction No. 2 of 2017. The shares will be placed with controlling shareholder Fairway Holdings. The issue is subject to approval by the CSE, SEC and shareholders at a general meeting.

Multi Finance closed last year with deposits that are fairly small at Rs. 650 million. But this was up by 75 per cent from the year before.

We have identified tools that will enable faster credit evaluations that will assist customers to know the status of their credit applications. We also want to carry out online transactions so that customers will not need to visit branches.