The Covid-19 pandemic has taken a heavy toll. It has led to the ruin of businesses and people’s livelihoods across the world.
In Sri Lanka, it has also resulted in the criticism of certain financial services. The leasing services of non-banking institutions in particular were identified as belonging to a so-called ‘Leasing Mafia.’ It is therefore pertinent to analyze the role of non-banking financial institutions in the country that have not received approval from the Central Bank of Sri Lanka.
Among the most credible institutions to respond to these allegations is People’s Leasing & Finance PLC, a leading non-banking financial entity.
Chief Executive Officer and General Manager Sabry Ibrahim in an interview, expressed his views regarding these issues and how a recognized leasing company should conduct itself.
Q: In the context of the current economic downturn and global pandemic, what is the role of a non-banking financial institution?
A: At a time when many businesses are facing hardships due to the economic downturn caused by the Covid-19 pandemic, the need for finance to rebuild livelihoods and revive economic activities is now greater than ever. In this backdrop, non-banking financial institutions (NBFIs) have an increasingly important role to play by providing access to finance to those who would not normally be able to obtain this from the more formal banking channels. NBFI’s, because of their more intimate knowledge about their customers and market conditions, can also play a value adding role by providing advice and playing a consultative role to their clients.
Q: In the current scenario, many businesses are in severe decline. To rescue your customers from these difficulties, what does your company do?
A: Certain businesses slump due to various reasons – from natural calamities to economic downturns and improper management. The coronavirus pandemic that affected the entire world also presents such a challenge, but, as a responsible financial company, we consider every customer valuable to us. We are therefore taking steps to provide relief to our customers who are facing difficulties and ruin due to the crisis. As a subsidiary of a leading state bank in this country, we are also obliged to follow the rules and regulations introduced by the government.
We have played a notable role in ensuring that the public transport sector returns to normalcy. As the finance company with the greatest involvement in this sector, our reduction of the moratorium interest rate to 4% will greatly benefit those affected.
This is not the first time that such a situation has arisen in the country. During such troubled times in the past, People’s Leasing & Finance acted for the benefit of customers. An example is the terrible calamity that befell our country after the tsunami of 2004. We were the non-banking financial company that provided tsunami relief loans to the largest number of affected people.
Likewise, following the Easter Sunday attacks last year, it was our company that supported the most number of customers by providing relief loans to rebuild businesses that had collapsed.
During both events, we, as a ‘people-friendly’ non-banking financial institution, were able to offer the required financial facilities and support to customers through our extensive branch network and committed and skilled staff. Our customers affected by those events will attest to this.
In addition, during natural disasters such as floods and landslides, we have been providing the required financial support to clients and were at the forefront among those providing assistance to the people.
Q: The so-called ‘Leasing Mafia’ of certain finance companies has been the subject of much discussion lately. How do you respond to this issue?
A: People’s Leasing & Finance lays much emphasis on minimizing the possibility of vehicles being acquired when customers experience difficulties in meeting their commitments regularly. Our skilled and experienced staff work with our customers to provide workable solutions that will ease the burden on them and enable them to revive their financial health. We then follow up the progress of the plan with the customer.
In addition we have established two special units at our head office in order to reach agreements with customers who have failed to pay their instalments. If customers who have defaulted on payments want to discuss their difficulties with the management, our staff will cooperate. We follow an ‘open door’ policy. When payments are in default, our company acts in accordance with Clause 56 of the Finance Leasing Act of 2000.
It must also be mentioned seizing of vehicles is only a last resort and takes place at least 6 months after default and all other options have been exhausted.
At the same time, our company registers the officers who acquire vehicles known as ‘seizers.’ We provide them guidance on how to deal with customers so as not to damage the reputation of either the company or the customer. Among the leasing companies, we were the first to hold a workshop for the officers who acquire vehicles, with the support of the police and the legal profession. This continues even today.
Q: This is the time that finance companies should change. That is, finance companies should go beyond the ‘traditional’ thinking followed at present and provide the public with more effective services. Does your institution have a plan to provide finance services in an innovative manner that exactly suits people’s requirements?
A: Yes. Actually, the Covid-19 pandemic made us realize that new business channels should be explored. It was a good motivation for businesses. It was as a result of this crisis that we were able to bring the people of this country closer to ‘digital finance services’ in banks and non-banking institutions. It was an opportunity to make the ‘digitization’ that we had already developed more appealing to people. Even during the curfew hours, many of our customers were able to gain access to their finances and carry out transactions because of this facility.
We were also able to settle interest payments of our depositors on the specified date. This was also due to the great dedication of our staff who performed their duties from home. It is now evident that our company is quite advanced in the sphere of information technology.
Our staff will continue to use information technology to offer customers innovative financial service experiences. Arrangements will also be made to promote, among our customers, the ‘PLC Online Digital Finance Service’ and ‘Intapp’ through mobile phones.
Similarly, a financial service that is custom-made for individual clients’ requirements is imperative today. We have already introduced a number of such innovative financial products. These have been created to suit each age group, status and nature of profession. These will enable each individual to optimize the benefits in an efficient manner. Further information can be obtained about these services from our network of branches.
Q: An issue has arisen these days regarding the ‘safety’ of non-banking financial institutions. What is your message to customers regarding the ‘safety’ of People’s Leasing & Finance?
A: Our company is a subsidiary and enjoys the support of probably the largest state bank in this country – the People’s Bank. I can assure you that we are safe, reliable and secure.
Furthermore, we are a listed company and obliged to follow the relevant rules and regulations. We are also constantly supervised by the Central Bank as a licensed finance company. Our operations are based on their guidance. Accordingly, we operate within a strong governance framework.
Today, we are a leading financial service provider connecting with the hearts of citizens. We have flourished for 24 years, drawing the highest number of customers in the industry and having the largest asset base. Commencing operations as a leasing company and as a provider of financial services, we have evolved into a strong institution with diversification through subsidiaries in various related fields.
Due to our financial strength and management capabilities, we have on several occasions been requested by the Central Bank to assist in the task of rebuilding finance companies that had collapsed. This is testimony to our strength and the esteem in which we are held. It was under our management that the depositors savings and employees’ jobs were safeguarded of some companies who were on the verge of collapse.
Q: What is the company’s contribution beyond providing financial services? How do its actions empower society at large?
A: We promote a number of social responsibility programmes throughout the year. These include protecting the environment, raising living standards and enhancing education, community care and health services. We have contributed towards achieving sustainable development targets, especially those of the United Nations. In addition, we prioritize environmental conservation to reduce global warming, carrying out long-term tree-planting campaigns and minimizing paper usage.
Q: What are the specialties of People’s Leasing & Finance PLC?
A: In 1996, our company was established as a subsidiary of People’s Bank, with the objective of upgrading the public transport services. Accordingly, we contributed towards the rolling out of 10,000 buses to develop the public transport system.
Subsequently, we provided leasing facilities and contributed to the empowerment of small and medium scale entrepreneurs to develop the agricultural and construction fields in Sri Lanka.
A unique feature of our company is the combination of state sector accountability with private sector flexibility. We became a leading financial services provider in this country over a 24 year period through farsighted leadership and by enhancing our specialties with cordiality, experience and efficient service.
According to Fitch Ratings Lanka, People’s Leasing & Finance is rated A+ (lka). We have also been recognized by the Ceylon Chamber of Commerce as one of the Top 10 Best Corporate Citizens of Sri Lanka for the 7th consecutive time. Further, Transparency International Sri Lanka (TISL) recently ranked us 3rd among the top 50 listed companies for transparency in corporate reporting. At the Brand Finance Awards 2019 which rated the most valuable and powerful brands in the country, the company was acclaimed as Sri Lanka’s most excellent non-banking financial institution. We are also ranked 13th among the Business Today Top 30 rankings and have won renowned local and international awards.
Looking ahead, we will continue to offer customers a friendly, efficient and ethical service. With the dedication of our management and staff, we can assure that we will always be there for them, even in times of crisis.
Sabry Ibrahim
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