LOLC looks to Laos, rest of Mekong Region for microfinance expansion
View(s):Having acquired a 60 per cent in Thaneakea Phum Cambodia (TPC), for US$ 20.3 million, the LOLC Group is eyeing to go to Laos and the greater Mekong Region of Southeast Asia, officials said.
“We are setting our sights on Laos,” one official told the Business Times, adding that in time to come they aim to go into the greater region. LOLC’s latest acquisition was through its fully owned subsidiary, LOLC Micro Investments Ltd (LOMI), which is the microfinance investment arm of LOLC.
The LOLC Group has received all required regulatory approvals, including approvals from the Central Bank, Ministry of Finance, National Bank of Cambodia and the Ministry of Commerce of Cambodia for the acquisition. “LOMI is poised to serve the micro clientele in the country to alleviate poverty and uplift the living standards of a community that was once considered as “unbankable” by most of the formal lending channels,” the official added.
TPC is the fifth largest microfinance company in Cambodia with a gross loan book of $ 100 million carrying out its business operations through 52 branches distributed throughout Cambodia, with a total staff of 1,100 personnel and currently has a customer base of 170,000 microfinance borrowers.
This is LOLC’s second overseas acquisition, after its maiden overseas venture in Cambodia in 2006 through its investment in PRASAC Micro Finance Institution Ltd (PRASAC), the largest microfinance Company in Cambodia. LOLC Currently holds 22.25 per cent of PRASAC.
In addition to the above acquisitions, LOLC commenced operations of its microfinance company in Myanmar – LOLC Myanmar Micro-Finance Company Ltd (LMML) – in 2013 as a green field operation, a media release by the company said.
In 2008, LOLC decided to spin off its microfinance business unit as a separate company – LOLC Micro Credit Ltd (LOMC). The Netherlands Development Finance Company FMO has been a shareholder of LOMC since its inception. LOMC was the first regulated microfinance institution in Sri Lanka with foreign equity partnership, according to the release. Further, Ishara Nanayakkara, Deputy Chairman of the LOLC Group was quoted as saying, “The LOLC Group’s business expansion strategy is aimed at strengthening its core financial services business further. Within Sri Lanka, we have firmly and consistently held our position as the largest diversified Non-Bank Financial Institution to date whilst our top performing companies have each held strong footholds in diverse sectors of the country’s economy. We are pleased that we were able to take our strategies and expertise overseas and to strengthen our position in the regional microfinance sphere. We hope to continue to explore opportunities to expand our overseas presence beyond Myanmar and Cambodia”.