MICROCAPITAL BRIEF: BRAC, LOLC Micro Investments Buy 90% of Shares of Sri Lanka’s Nanda Investments and Finance, Plan its Downscaling to Microfinance

BRAC, an NGO that was formally known as the Bangladesh Rehabilitation Assistance Committee and serves eleven countries as of 2013, has bought 56.6 percent of the shares of Nanda Investments and Finance Public Limited Company, a Sri Lankan finance company specializing in deposits, loans, leasing and installment-based purchases [1]. Lanka Orix Leasing Company (LOLC) Micro Investments, a holding of Sri Lanka’s LOLC, also acquired a 33.4 percent stake in Nanda Investments [1]. LOLC is a member of Orix, a Japanese conglomerate that reported revenue of JPY 8.33 trillion (USD 8.3 billion) during 2012.

Nanda Investments was established in Colombo in 1961 and was listed on Colombo Stock Exchange in July 2011 [2]. BRAC and LOLC plan to oversee the downscaling of Nanda Investments from providing traditional financial services to delivering microfinance services to poor people.

BRAC seeks to execute “holistic development practices” that include microfinance, education, healthcare, legal services and other services that promote the socio-political empowerment of women [3]. It is estimated that BRAC provides microfinance services to approximately 8 million poor and disadvantaged people [3]. LOLC Micro Investments seeks to support rural development by focusing on areas such as financial services, agriculture and renewable energy. As of 2012, BRAC reported assets of USD 790 million.

By Anesa Kratovac, Research Associate

About Bangladesh Rural Advancement Committee (BRAC)

Established in 1972 as the Bangladesh Rehabilitation Assistance Committee, BRAC is a development organization based in Bangladesh. According to its website, “BRAC works with people whose lives are dominated by extreme poverty, illiteracy, disease and handicaps. With multifaceted development interventions, BRAC strives to bring about change in the quality of life of poor people in Bangladesh.” BRAC’s initiatives include microfinance, advocacy campaigns, food security, community development, water and sanitation disaster relief, social enterprises, and human rights efforts. As of year-end 2012, BRAC reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 790 million, a gross loan portfolio of USD 754 million, 4.2 million borrowers and 5.84 million depositors with USD 313 million in total deposits. BRAC has not reported return on assets (ROA) or return on equity (ROE) for 2012, but reported ROA of 2.78 percent and ROE of 9.30 percent in 2011.

About Lanka ORIX Leasing Company

Incorporated in March 1980, Lanka Orix Leasing Company (LOLC) is an unquoted public company that provides leasing finance to entrepreneurs and commercial institutions, enabling them to acquire the necessary machinery and equipment. LOLC is based in Rajagiriya, Sri Lanka. As of March 2012, LOLC reported LKR 58 billion (USD 446 million) in total assets, LKR 25 billion (USD 191 million) in total liabilities and LKR 33 billion (USD 256 million) in total equity. LOLC is a member of the Japanese conglomerate Orix.

Sources and Additional Resources:

[1]  The Daily Star news article, “Brac buys 56.6pc stake in Lankan Finance Company”, http://www.thedailystar.net/beta2/news/brac-buys-56-6pc-stake-in-lankan-finance-company/

[2] Nanda Investments and Finance PLC website, http://www.nifl.lk/aboutus.html

[3] BRAC Website, http://www.brac.net

Colombo Page news article, “BRAC and LOLC together buy 90 percent stake in Lankan finance company”, http://www.colombopage.com/archive_13A/Jun27_1372317760CH.php

MicroCapital Universe Profile: BRAC, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BRAC

MicroCapital Universe Profile: LOLC Micro Credit Ltd. (LOMC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=LOLC+Micro+Credit+Ltd.+%28LOMC%29

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