The LOLC Group
The LOLC Group (the Group) is the largest and most diversified financial conglomerate in Sri Lanka. Its portfolio further includes leisure, plantations, agri-inputs, renewable energy, construction, manufacturing, trading and other strategic investments into technology, research and innovation. As a leading player in Sri Lanka’s SME and microfinance sectors, the Group has been a catalyst in facilitating financial inclusion. Our role in microfinance has enabled us to benefit many people and communities, while striving to maximize environmental benefits through green operations and processes in line with our triple bottom line focus in all we do.
LOLC’s footprint spans every district from rural hinterlands to major cities enduring business partnerships with a host of financial and developmental organizations across the world. With investments in Cambodia, Myanmar, Pakistan, Indonesia, the Philippines, Nigeria, Zambia, the Maldives and Sierra Leone as well as corporate offices in Singapore, the UAE and Mauritius, LOLC continues to expand its international presence by actively seeking new opportunities in the region.
LOLC Group’s flagship financial entity, LOLC Finance, is a public limited liability company incorporated under the Companies Act No 7 of 1982 and re-registered under the Companies Act No 7 of 2007 on the 27th March 2008. The company was listed on the Colombo Stock Exchange in 2011. LOLC Finance is licensed by the Monetary Board of the Central Bank of Sri Lanka under the Finance Business Act No 42 of 2011 (as a non-bank financial institute – NBFI) and is rated ‘(SL) A Stable’ by ICRA Lanka (a wholly-owned subsidiary of ICRA, an associate of Moody’s Investors Service). LOLC Finance offers a wide range of financial services spanning from loans to leases, and mobilizes both local and foreign currency fixed deposits and savings with SWIFT network membership. Consolidating LOLC Group’s position as one of the largest and most diversified financial conglomerates in the country, the merger of the microcredit company, LOLC Micro Credit, with LOLC Finance in a strategic move, propelled LOLC Finance to the forefront of the industry as the largest deposit-taking licensed finance company (LFC) in the country.
LOLC Finance is also one of the key players in the Islamic finance space in Sri Lanka, offering innovative solutions through its Al-Falaah Alternate Financial Services Unit (LOLC Al-Falaah). LOLC Al-Falaah, Sri Lanka’s most awarded and trusted alternate financial services brand, was established in 2007 and functions directly under the auspices of LOLC Finance. It is a strategic business unit (SBU) that offers 360 degree alternate financial solutions under the concepts of Mudarabah/profit-sharing investments, Wakalah/term deposits, Ijarah/leasing, Murabahah/trade finance, Musawwamah/import finance, diminishing Musharakah/property and project finance, Wakalah lending/business and working capital finance and the Wadiah Gold Storage Facility from LOLC Finance’s branch network of 141 locations island-wide.
LOLC Finance is renowned for its pioneer status within the industry as the first NBFI in Sri Lanka to offer regulated Islamic investment and financing products. Some of the complementary industry-leading technological advancements incorporated for the digital penetration of these products are:
- LOLC real-time internet banking and mobile-app
- i-Pay mobile-app for real-time utility payments and multiple banking account maintenance
- Real-time fund transfers via the Common Electronic Fund Transfer Switch with Lanka Pay
- SMS alerts banking transactions and digital statements
- International Visa ATM/debit cards
- Remittance agreements with Cash Wiz, Australia and DFCC, Lanka Money Transfer, and
- Sri Lanka Interbank Payment System for secondary participants.
LOLC Al-Falaah, since its inception in 2007, is closely monitored and guided by an independent Scholar Supervisory Board to ensure that this SBU is at all times and in every way compliant with the rules, principles and values of Islamic financing vis-a-vis alternate financing.
Empowering entrepreneurship of ladies in the community
The Al-Falaah Ladies Business Unit (LBU) was established in February 2013 with the aim of offering a product focused on women and empowering them to plan their financial future wisely. Titled ‘Blossom of Success’, this unique business concept offers customized solutions for both investors and borrowers with high returns and flexible repayment options respectively. These finance solutions are available for both self-employed individuals and professionals with below-value additions to reap maximum benefits. As a value addition, the LBU launched the ‘Empress’ discount card, designed exclusively for Al-Falaah Ladies Accounts holders, providing a plethora of benefits for both working and non-working women. This special discount card is the first of its kind to be offered by an Islamic bank or financial institution in Sri Lanka, enabling cardholders to shop and save simultaneously, manage household expenditure and avail themselves of exclusive seasonal and year-round offers from more than 100 high-street merchants island-wide.
Minors and senior citizens
A pioneering product in the Sri Lankan Islamic financial services sector, the ‘Al-Falaah Junior’ Mudarabah investment product is designed to help children achieve their full potential with the aim of encouraging the savings habit and inculcating financial discipline from a young age. A minor’s savings account, Al-Falaah Junior offers a comprehensive savings plan based on the Islamic economic principles of profit-sharing. It offers attractive benefits such as high profit returns, a fully-integrated savings account with a passbook and exciting complimentary gifts. This children’s savings account empowers the building of a secure financial future for children, so that on completing 18 years, the child holds substantial savings in his of her account to pursue ambitious academic goals.
Another growing banking need identified is the requirement for senior citizens to have better access to financial security and independence so that they may live their life with dignity. Realizing their unique needs, LOLC Al-Falaah has designed solutions that offer them maximum returns and a feeling of security in their twilight years. The ‘Al-Falaah Senior’ Mudarabah investment product provides multiple benefits from a choice of investment options between one and 60 months with attractive profit returns, a fully-integrated savings passbook with the flexibility of unlimited deposits and withdrawals, global access through the Visa network and accessible through over 100 LOLC branches and dedicated Al-Falaah service centers located island-wide.
Sri Lanka’s first Sukuk Ijarah issuance, a Shariah compliant securitization alternative, was launched by LOLC Al-Falaah in 2016 and matured in 2019. The in-depth expertise of LOLC Al-Falaah was evident in this industry-first Sukuk; thus the initiative was a trend-setter that paved the way for all other players in the Islamic finance industry in the country to benefit from the concept, as it streamlined all protocols with the regulators. The company plans to issue a second Sukuk-based instrument based on its requirement shortly.
This pioneering Sukuk issuance in Sri Lanka and in the region will contribute to further develop the Islamic finance capital market, by not only opening a new window for companies seeking Islamic finance but also providing a viable investment instrument for the potential Islamic investor.
LOLC Al-Falaah‘s successful securing of a US$10 million funding line from the Islamic Corporation for the Development of the Private Sector (ICD) headquartered in Jeddah was made as a reference as the single largest bilateral transaction between an Islamic financial institution based overseas and an Islamic finance unit in the non-banking sector in Sri Lanka in the year 2017. It was the first Sri Lankan company to be granted funding from the IsDB’s ICD that was up for renewal in 2020.
Wadiah Gold Storage Facility
LOLC Al-Falaah recently unveiled its ground-breaking new product, the Wadiah Gold Storage Facility. This is the first time a finance company in Sri Lanka is offering this type of facility. It is a unique gold storage option offered to Al-Falaah’s valued customer base. All gold articles are tested for quality and authenticity using state-of-the art equipment by the company’s experienced staff without causing any damage to the jewelry. A unique ‘Gold Storage Certificate’ with a description of the article, including weight, quality and quantity along with the market value will be issued to the customer when obtaining this facility. A unique feature of this product is that the depositor can obtain a ‘Benevolent Loan’ against this ‘Gold Storage Certificate’ and settle within the agreed period. This option is mainly focused on the microfinance segment, where the self-employed and home industries can obtain cash advances for their small business needs.
Training, development and awareness
LOLC Al-Falaah has always been a model of business excellence, bringing creativity, passion and commitment to everything we do. Our focus is not solely on the excellence of our business operations — we are mindful of our contribution to society, through various corporate social responsibility projects which are aligned on a group scale. For more than a decade, the company has worked to create increasing and sustainable value for diverse customers and other stakeholders, empowering lives, developing communities and enriching the Sri Lankan economy. Today, the strength of our portfolio has combined with our fine fundamentals to make LOLC Al-Falaah a shining star in the nation’s competitive financial sector.
LOLC Al-Falaah also plays a strategic role for the LOLC Group, which is renowned today as one of Sri Lanka’s largest financial conglomerates that also look into potential Islamic business opportunities within the synergies of the group. This alternate financial services unit has made headway into launching Takaful operations in its associate companies, Al-Falaah General Takaful Unit of LOLC General Insurance in 2014 and Al-Falaah Life Takaful of LOLC Life Assurance in 2016 — these are the results of its deliberations. Further, the expertise of LOLC Al-Falaah has also provided advisory services in launching the Islamic Business Division of Commercial Leasing & Finance in 2015 which is also another LFC of the group that offers alternate financial services independent of LOLC Al-Falaah. Moving ahead, the SBU is putting in place the necessary framework to expand its advisory role through LOLC’s affiliated international group companies in Pak Oman Microfinance Company in Pakistan and Sumut Sarana Ventura in Indonesia in the near future, and then also to reach out to potential associate and subsidiary companies of LOLC Group’s global network.
Global accreditation and recognition
Recently, the company sealed a triple win by securing the ‘Best Leasing Provider Award’ in three of the most coveted awards held to recognize the institutions that have made significant contributions to the Islamic finance industry during the 2019/20 financial year. The triple crowns were the ‘Gold’ award for ‘Leasing Company of the Year’ for the 2019/20 financial year at the 9th Sri Lanka Islamic Banking and Finance Industry (SLIBFI) Awards, the ‘Gold’ award for ‘Leasing Company of the Year’ at the 5th Islamic Finance Forum South Asia (IFFSA) Awards for the 2019/20 financial year and the winner for ‘Best Islamic Leasing Provider of the Year’ in Islamic Finance news (IFN)’s first Global Non-Banking Financial Institutions (NBFI) Polls for 2020.
The Islamic finance fraternity has also voted LOLC Al-Falaah as among the top global industry giants and it received the ‘Best Islamic Bank in Sri Lanka’ and ‘Best Islamic Leasing Provider (Global)’ awards at the IFN Best Banks/NBFI Awards for the third consecutive year running, and IFN Deal of the Year 2016 for its first landmark Sukuk Ijarah issuance in Sri Lanka. It was further recognized at the SLIBFI and IFFSA Awards with multiple accolades in the categories of ‘Entity of the Year’ and ‘Leasing Company of the Year’ as well as ‘Social Upliftment Award of the Year’ over the past decade. Other accolades for its disclosures and transparencies were recognized in various award platforms such as ARC Global Awards and LACP Global Vision Awards for its specialized annual reports.