Sri Lanka’s LOLC Holdings plans to sell Cambodian unit

LOLC Holdings Plc, Sri Lanka’s second-largest publicly traded company by revenue, plans to sell its 70 per cent stake in Prasac Microfinance Institution Ltd, which also counts Hong Kong’s Bank of East Asia Ltd. as a shareholder, LOLC deputy chairman Ishara Nanayakkara said.

Nanayakkara told Bloomberg that LOLC Holdings Plc plans to sell its stake in a unit in Cambodia and use the proceeds to fund the acquisition of microfinance firms in emerging markets from Brazil to India.

 

 

“It is very large as a microfinance institution. I think Prasac needs to move to a bank,” said Nanayakkara in an interview with Bloomberg at LOLC’s headquarters in Colombo.

“The company’s thirty per cent return on equity in Cambodia, which has a largely dollarised economy, makes it attractive, he said.

 

As of 2018, Prasac’s total assets amounted to $2.37 billion. Outstanding loans amounted to $1.96 billion while total deposits reached $1.29 billion.

By the end of last year, Prasac had installed more than 126 ATMs, 498 point of sale (POS) terminals and had amassed 11,200 mobile banking users.

The deputy chairman of Cambodia Microfinance Association Bun Mony denied on Tuesday that the plan would negatively impact Cambodia’s microfinance institution (MFI) sector, noting that it would, in fact, attract investors to join the financial firm.

“It is not uncommon for a shareholder to take out their stake and invest in other projects. I don’t see it impacting the MFI [sector], including Prasac,” Mony told The Post. “I believe a new shareholder will commit to making the institution [Prasac] grow,” he said.http://https://www.phnompenhpost.com/business/sri-lankas-lolc-holdings-plans-sell-cambodian-unit