NBFI Sector

[yellow knifeTop contributor]

NBFI sector is known as Shadow Banks. While evaluating individual companies like Central Fiance , People's Leasing, LB Finance lets study the entire NBFI sector separately.

Entire Licensed Finance Companies are listed below

Licensed Finance Companies (as at 12th August 2015)
No	Name & Address	Contact Nos.
1.	Abans Finance PLC 400, Galle Road, Colombo 3	Tel. Fax E-mail Website	(94) 11 2375531-4 (94) 11 2375517 [You must be registered and logged in to see this link.]
2.	Alliance Finance Co. PLC Alliance House 84, Ward Place Colombo 7	Tel Fax E-mail Website	(94) 11 2673673 (94) 11 2697205 [You must be registered and logged in to see this link.]
3.	AMW Capital Leasing and Finance PLC 445, Bauddhaloka Mawatha Colombo 08	Tel Fax E-mail Website	(94) 11 2671371 (94) 11 2671272 - [You must be registered and logged in to see this link.]
4.	Arpico Finance Co PLC 146, Havelock Road Colombo 5	Tel. Fax E-mail Website	(94) 11 5553663 (94) 11 2500259 [You must be registered and logged in to see this link.]
5.	Asia Asset Finance PLC 76/1, Dharmapala Mawatha Colombo 3	Tel. Fax E-mail Website	(94) 11 2574682-5 (94) 11 2577477 [You must be registered and logged in to see this link.] [url=http://www.asiaassetfinance.lk /][You must be registered and logged in to see this link.] [/url]
6.	Asian Finance Ltd 69, S De S Jayasinghe Mawatha Kohuwala, Nugegoda	Tel. Fax E-mail Website	(94) 11 4500200 (94) 11 2856426 [You must be registered and logged in to see this link.] [url=http://www.asianfinance.lk /][You must be registered and logged in to see this link.] [/url]
7.	Associated Motor Finance Co. PLC 89, Hyde Park Corner Colombo 2	Tel. Fax E-mail Website	(94) 11 2687158 (94) 11 2688760 [You must be registered and logged in to see this link.] [url=http://www.amf.lk /][You must be registered and logged in to see this link.] [/url]
8.	Bimputh Finance PLC No 362, Colombo Road, Pepiliyana Boralesgamuwa	Tel Fax E-mail Website	(94) 11 5759037 (94) 11 5550368 [You must be registered and logged in to see this link.]
9.	BRAC Lanka Finance PLC (Formerly, Nanda Investments & Finance PLC ) 25, Dr. C W W Kannangara Mawatha Colombo 7	Tel. Fax E-mail Website	(94) 11 2686523-6 (94) 11 2698614 [You must be registered and logged in to see this link.] -
10.	Capital Alliance Finance PLC 21, Kumara Veediya Kandy	Tel Fax E-mail Website	(94) 81 2224619 (94) 81 2222703 [You must be registered and logged in to see this link.]
11.	Central Finance Co PLC 84, Raja Veediya Kandy	Tel. Fax E-mail Website	(94) 81 2227000 (94) 81 2232047 [You must be registered and logged in to see this link.]
12.	Central Investments & Finance PLC 181/1A, Dharmapala Mawatha Colombo 7 (Managing Agent - People's Leasing and Finance PLC with effect from 1st July 2013. The deposit mobilization of CIFL has been suspended with effect from 01st July 2013 until further notice.)	Tel. Fax E-mail Website	(94) 11 2698888 (94) 11 2686173 [You must be registered and logged in to see this link.]
13.	Chilaw Finance PLC 44A, Kurunegala Road Chilaw	Tel. Fax E-mail Website	(94) 32 2222055 (94) 32-2223273 [You must be registered and logged in to see this link.] -
14.	Citizens Development Business Finance PLC 18, Sri Sangaraja Mawatha Colombo 10	Tel Fax E-mail Website	(94) 11 7388388 (94) 11 2429888 [You must be registered and logged in to see this link.]
15.	City Finance Corporation Ltd. 72, Rajagiriya Road, Rajagiriya	Tel. Fax E-mail Website	(94) 11 4640325-6 (94) 11 2876639 [You must be registered and logged in to see this link.]
16.	Commercial Credit & Finance PLC 106, Yatinuwara Veediya Kandy	Tel Fax E-mail Website	(94) 81 2234963 - 4 (94) 81 2234390 [You must be registered and logged in to see this link.]
17.	Commercial Leasing & Finance PLC 68, Bauddhaloka Mawatha, Bambalapitiya, Colombo 04	Tel Fax E-mail Website	(94) 011 4526526 (94) 011 4526517 [email=clc@.lk][You must be registered and logged in to see this link.][/email] [You must be registered and logged in to see this link.]
18.	ETI Finance Ltd 114, Ward Place Colombo 7	Tel. Fax E-mail Website	(94) 11 5323323 (94) 11 2674435 [You must be registered and logged in to see this link.]
19.	George Steuart Finance PLC 15, Station Road, Colombo 3	Tel. Fax E-mail Website	(94) 11 2375408-12 (94) 11 2375411 [You must be registered and logged in to see this link.]
20.	Ideal Finance Ltd. 299,Dr. Colvin R De Silva Mawatha Union Place Colombo 2	Tel. Fax E-mail Website	(94) 11 2396060 (94) 11 2396757 [You must be registered and logged in to see this link.]
21.	Indra Finance Ltd 187, Katugastota Road, Kandy	Tel. Fax E-mail Website	(94) 81 2213495/8 (94) 81 2224521 [You must be registered and logged in to see this link.]
22.	Kanrich Finance Ltd 69, Ward Place, Colombo 7	Tel. Fax E-mail website	(94) 11 2685656 / 4381381 (94) 11 4717784 [You must be registered and logged in to see this link.]
23.	Lanka ORIX Finance PLC 100/1, Sri Jayawardenapura Mawatha Rajagiriya	Tel. Fax E-mail Website	(94) 11 5880880 (94) 11 2865606 [You must be registered and logged in to see this link.]
24.	L B Finance PLC 275/75, Prof.Stanley Wijesundera Mawatha Colombo 7	Tel. Fax E-mail Website	(94) 11 4521000 (94) 11 5345327 [You must be registered and logged in to see this link.]
25.	Melsta Regal Finance Ltd. Level 1, No.33, Park Street Colombo 03	Tel. Fax E-mail Website	(94) 11 5200100 (94) 11 5200111 [You must be registered and logged in to see this link.]
26.	Merchant Bank of Sri Lanka & Finance PLC Bank of Ceylon Merchant Tower No.28, St.Michael’s Road Colombo 3	Tel. Fax E-mail Website	(94) 11 4711711 (94) 11 4711716 - -
27.	Mercantile Investments & Finance PLC 236, Galle Road Colombo 3	Tel. Fax E-mail Website	(94) 11 2343720-7 (94) 11 2434623 [You must be registered and logged in to see this link.]
28.	Multi Finance PLC 281, R. A. De Mel Mawatha Colombo 3	Tel. Fax E-mail Website	(94) 11 4645555 (94) 11 2370316 [You must be registered and logged in to see this link.]
29.	Nation Lanka Finance PLC 28, Dickmans Road, Colombo 5	Tel. Fax E-mail Website	(94) 11 4760800 (94) 11 4760867 [You must be registered and logged in to see this link.]
30.	Orient Finance PLC No. 2, Deal Place, Colombo 3	Tel. Fax E-mail Website	-
31.	People's Leasing & Finance PLC 1161, Maradana Road, Colombo 8	Tel. Fax E-mail Website	(94) 11 2631631 (94) 11 2481105 [You must be registered and logged in to see this link.]
32.	People's Merchant Finance PLC 21, Nawam Mawatha, Colombo 2	Tel. Fax E-mail Website	(94) 11 2300191 (94) 11 2300190 [You must be registered and logged in to see this link.]
33.	Prime Grameen Micro Finance Ltd Prime Grameen Building, 168, Nawala Road, Nugegoda	Tel. Fax E-mail Website	(94) 11 2176262 (94) 11 2176263 [You must be registered and logged in to see this link.]
34.	Richard Pieris Finance Ltd. No.69, Hyde Park Corner Colombo 2	Tel. Fax E-mail Website	(94) 11 5900600 (94) 11 2680775
35.	Sarvodaya Development Finance Co. Ltd. (Formerly known as Deshodaya Development Finance Co. Ltd.) "Arthadharma Kendraya" 45, Rawatawatte Road, Moratuwa	Tel. Fax E-mail Website	(94) 11 5444666 (94) 11 2655122 [You must be registered and logged in to see this link.]
36.	Senkadagala Finance PLC 267, 2nd Floor, Galle Road, Colombo 3	Tel. Fax E-mail Website	(94) 11 2301301 (94) 11 2301937 [You must be registered and logged in to see this link.]
37.	Singer Finance (Lanka) PLC 80, Nawam Mawatha, Colombo 2	Tel. Fax E-mail Website	(94) 11 2303717 (94) 11 2303715 [You must be registered and logged in to see this link.]
38.	Sinhaputhra Finance PLC 11, Hill Street, Kandy	Tel. Fax E-mail Website	(94) 81 5555555 (94) 81 2203403 [You must be registered and logged in to see this link.]
39.	Siyapatha Finance Ltd. (Formerly Sampath Leasing & Factoring Ltd.) 46/12,"Sayuru Sevana" Nawam Mawatha Colombo 2	Tel. Fax E-mail website	(94) 11 7605605 (94) 11 7605606 [You must be registered and logged in to see this link.] --
40.	Softlogic Finance PLC 33, Park Street, Colombo 2	Tel. Fax E-mail Website	(94) 11 2307284-8 (94) 11 2307289 [You must be registered and logged in to see this link.]
41.	Swarnamahal Financial Services PLC 654,Level 1, Galle Road Colombo 3	Tel. Fax E-mail Website	(94) 11 2556160-4 (94) 11 2595062 [You must be registered and logged in to see this link.]
42.	The Finance Co PLC "The Finance House" 55, Lauries Place R A De Mel Mawatha Colombo 4	Tel. Fax E-mail Website	(94) 11 2580210 (94) 11 2580098 [You must be registered and logged in to see this link.]
43.	The Standard Credit Finance Ltd 277, Union Place, Colombo 2	Tel. Fax E-mail Website	(94) 11 5370370 (94) 11 5371371 [You must be registered and logged in to see this link.] -
44.	TKS Finance Ltd 245, Dharmapala Mawatha, Colombo 7	Tel. Fax E-mail Website	(94) 11 4799999 (94) 11 4799912 [You must be registered and logged in to see this link.]
45.	Trade Finance & Investments PLC 459, Union Place Colombo 2	Tel. Fax E-mail Website	(94) 11 2688421-2 (94) 11 2699226 [You must be registered and logged in to see this link.]
46.	U B Finance Co. Ltd 10,Daisy Villa Avenue Colombo 4	Tel. Fax E-mail Website	(94) 11 2168888 (94) 11 2508517 [You must be registered and logged in to see this link.]
47.	Vallibel Finance PLC 310, Galle Road Colombo 3	Tel. Fax E-mail Website	(94) 11 2370990 / 4393100 (94) 11 2375713 [You must be registered and logged in to see this link.]

[yellow knifeTop contributor]

Following is the list of Specialized Leasing Companies

Specialised Leasing Companies
1.	Assetline Leasing Co Ltd 120,120A, Pannipitiya Road Battaramulla	Tel. Fax E-mail Website	(94) 11 4700100 (94) 11 4700112 [You must be registered and logged in to see this link.]
2.	Co-operative Leasing Co Ltd "Ceyesta House", 327/3/1, Galle Road Colombo 3	Tel. Fax E-mail Website	(94) 11 2573743 (94) 11 2573744 [You must be registered and logged in to see this link.]
3.	Isuru Leasing Co. Ltd (Formerly, Isuru Finance Comapny Ltd) 552, Peradeniya Road Kandy	Tel. Fax E-mail Website	(94) 081 4473547 (94) 081 4473547 [You must be registered and logged in to see this link.] -
4.	Laugfs Capital Ltd (Formerly Softlogic Credit Limited) 17, Sunethradevi Mawatha Kohuwala	Tel. Fax E-mail Website	(94) 011 5701701 (94) 011 5404454 [You must be registered and logged in to see this link.] -
5.	Lisvin Investments Ltd 120, 120A, Pannipitiya Road Battaramulla	Tel. Fax E-mail Website	(94) 11 7787878 (94) 11 5520451 [You must be registered and logged in to see this link.] [url=http://www.lisvin.com /][You must be registered and logged in to see this link.]
6.	LOLC Micro Credit Ltd. 100/1, Sri Jayawardenapura Mawatha Rajagiriya	Tel. Fax E-mail Website	(94) 11 5880880 (94) 11 2865606 [You must be registered and logged in to see this link.] [url=http:// [You must be registered and logged in to see this link.] /] [You must be registered and logged in to see this link.]
7.	Merchant Bank of Sri Lanka PLC Bank of Ceylon Merchant Tower 28, St. Michael's Road Colombo 03	Tel. Fax E-mail Website	(94) 11 4711711 (94) 11 2565666 [You must be registered and logged in to see this link.] [url=http://www.mbslbank.com /][You must be registered and logged in to see this link.] [/url]
8.	Newest Capital Ltd 36, Kirula Road, Colombo 05	Tel. Fax E-mail Website	(94) 11 5740700 (94) 11 2684049 [You must be registered and logged in to see this link.] -
9.	SMB Leasing PLC (Formerly Seylan Merchant Bank PLC) 110, D S Senanayake Mawatha Colombo 8	Tel. Fax E-mail Website	(94) 11 4222888 (94) 11 4222880 [You must be registered and logged in to see this link.]

[SrirangaVeteran]

Thanks for sharing.

Please check inbox.

[yellow knifeTop contributor]

Rating agencies issue different grades for financial intermediaries and other companies.. Its important to know these grading by different firms..

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[yellow knifeTop contributor]

Capital Adequacy ratio is another factor to be considered when evaluating banks and NBFIs

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[yellow knifeTop contributor]

Fitch Rating Grades of different companies that include banks and NBFIs

	[You must be registered and logged in to see this image.]	Citibank N.A.- Colombo Branch	AAA(lka)	Stable
		Dialog Axiata PLC	AAA(lka)	Stable
		Distilleries Company of Sri Lanka PLC	AAA(lka)	Stable
		HSBC Sri Lanka Branch	AAA(lka)	Stable
		National Savings Bank	AAA(lka)	Stable
		Sri Lanka Telecom PLC	AAA(lka)	Stable
		Standard Chartered Bank, Sri Lanka Branch	AAA(lka)	Stable
		Bank of Ceylon	AA+(lka)	Stable
		People's Bank	AA+(lka)	Stable
		Commercial Bank of Ceylon PLC	AA(lka)	Stable
		Sri Lanka Insurance Corporation Ltd	AA(lka)	Stable
		DFCC Bank	AA-(lka)	Stable
		DFCC Vardhana Bank	AA-(lka)	Stable
		Hatton National Bank PLC	AA-(lka)	Stable
		Lion Brewery (Ceylon) PLC	AA-(lka)	Stable
		National Development Bank PLC	AA-(lka)	Stable
		People's Leasing & Finance PLC	AA-(lka)	Stable
		Central Finance Company PLC	A+(lka)	Stable
		Melsta Regal Finance Ltd	A+(lka)	Stable
		Sampath Bank PLC	A+(lka)	Stable
		Ceylon Income Fund	A(lka)	Rating Watch Negative
		HNB Assurance PLC	A(lka)	Stable
		Nations Trust Bank PLC	A(lka)	Stable
		Seylan Bank PLC	A-(lka)	Stable
		Singer (Sri Lanka) PLC	A-(lka)	Stable
		Siyapatha Finance Limited	A-(lka)	Stable
		Abans Limited	BBB+(lka)	Negative
		AMW Capital Leasing and Finance PLC	BBB+(lka)	Stable
		Senkadagala Finance PLC	BBB+(lka)	Stable
		HDFC Bank	BBB(lka)	Stable
		Pan Asia Banking Corporation PLC	BBB(lka)	Negative
		Singer Finance (Lanka) PLC	BBB(lka)	Stable
		Sanasa Development Bank Limited	BB+(lka)	Stable
		Union Bank of Colombo PLC	BB+(lka)	Stable
		Amana Bank PLC	BB(lka)	Stable
		Ceylon Dollar Bond Fund	BB-
		Ceylon Gilt-edged Fund	WD
		DSI Holdings Limited	WD
		John Keells Holdings PLC	WD
		People's Merchant Finance PLC	WD	Rating Watch Negative
		Pradeshiya Sanwardhana Bank	WD

[yellow knifeTop contributor]

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[yellow knifeTop contributor]

Banks and NBFIs are financial intermediaries. Financial intermediaries collect money from excess units and transfer them to deficit units. In other words they accepts deposits and provide loans.

Then nature of business is such that these businesses can be run with less of owners capital.

Unlike other companies , owners money (equity) of banks and finance companies very low and they play with others money.

The distinctive function of the banker, says Ricardo," begins as soon as he use the money of others" as long as he uses his own money he is only a capitalist

Page 15 Lombard Street... A description of Money Market.. by Walter Bagehot

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[yellow knifeTop contributor]

This is why Banks and NBFIs are subject to supervision of an independent regulator which we call Central Bank in Sri Lanka, Federal Reserve in USA, Bank of England, Bank of Canada, Reserve Bank of India, People's Bank of China...etc

[yellow knifeTop contributor]

Banks and NBFI sector move in parallel directions. " Too big to fail" is a common term as when these institutions fail they can not be allowed to collapse since the impact is so high. Therefore for a long term investor identifying big players in the market is important. Following is a summary of the Revenue situation of all companies that I have evaluated so far. This pie chart shows how important finance sector to the Sri Lankan investor.

Further I remember one important statement of a Srirangas post.

" What is the single largest expenditure of an average middle income earner?"

That's loan interest. So its no doubt banks and finance lead the market.

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[yellow knifeTop contributor]

Central Bank from time to time take qualitative and quantitative directions towards quality and quantity of this sector.

Recent development as at 15th Sept 2015

ඉදිරියේදී වාහන ලීසිං පහසුකම් යටත් මිලදී ගැනීමේදී එම වාහනයේ වටිනාකමින් 70%ක ප‍්‍රමාණයකට පමණක් එම පහසුකම ලබා දීමේ අනිවර්ය කොන්දේසියක් ශ්‍රී ලංකා මහ බැංකුව විසින් මෙරට සියළුම බැංකු හා මූල්‍ය සමාගම් වෙත පනවා තිබේ.
මේ අනුව වාහන මිලදී ගැනීමේදී අනිවාර්යෙන්ම එම වාහනයේ වටිනාකමින් 30ක් මුදලින් ගෙවිය යුතුවනු ඇත.
තවත් ආකාරයකට කිවහොත් මේ වන විට වැඩි වශයෙන් අලෙවි වන ඇල්ටෝ කුඩා කාරයක් මිලදී ගැනීමට අනාවාර්යෙන්ම මූලික ගෙවීම ලක්‍ෂ හතරහමාර ඉක්මවනු ඇත.

[BackstageTop contributor]

Superb YK, you are indeed a gem.

[DocStockTop contributor]

Central Bank from time to time take qualitative and quantitative directions towards quality and quantity of this sector.

Recent development as at 15th Sept 2015

ඉදිරියේදී වාහන ලීසිං පහසුකම් යටත් මිලදී ගැනීමේදී එම වාහනයේ වටිනාකමින් 70%ක ප‍්‍රමාණයකට පමණක් එම පහසුකම ලබා දීමේ අනිවර්ය කොන්දේසියක් ශ්‍රී ලංකා මහ බැංකුව විසින් මෙරට සියළුම බැංකු හා මූල්‍ය සමාගම් වෙත පනවා තිබේ.
මේ අනුව වාහන මිලදී ගැනීමේදී අනිවාර්යෙන්ම එම වාහනයේ වටිනාකමින් 30ක් මුදලින් ගෙවිය යුතුවනු ඇත.
තවත් ආකාරයකට කිවහොත් මේ වන විට වැඩි වශයෙන් අලෙවි වන ඇල්ටෝ කුඩා කාරයක් මිලදී ගැනීමට අනාවාර්යෙන්ම මූලික ගෙවීම ලක්‍ෂ හතරහමාර ඉක්මවනු ඇත.

CB is making a mockery of itself, yet again. Gently nudging the door(not even closing it) even while seeing the horses bolting with lots of FOREX.

[Ethical TraderTop contributor]

Superb YK. Thanks.

[yellow knifeTop contributor]

Quantitative Controls look into the quantity ( money supply/credit creating ) and qualitative into the direction where money flow.

Quantity is decided by

1. OMO - Open Market Operations or by buying and selling securities
2. SRR -Statutory Reserve Ratio used to create credit
3. Interest Window- being the lender of last resort CBSL can influence with changing interest rate


with qualitative measures like moral suasion, Portfolio Ceilings and adjusting security margins the direction where credit flows can be controlled.

Now lets look at the impact of setting the 70% maximum leasing cover for vehicles. I know that most  don't like this move as we all are individually thinking about ourselves or only about the company.


Lets assume there is a car at the value of USD 30,000

Now we purchase the car when 1 UDS = LKR 130

So the cost is Rs 3,900,000.00

So the Leasing company give me a loan of 3,510,000 being 90% lease.

==================================

Car is still USD 30,000 but now (assume) 1 USD = LKR 150

So my friend who is ordering the same car find its cost now is Rs 4,500,000.

But since CBSL has imposed the maximum ceiling of 70% he can get only Rs 3,150,000 and if not of the ceiling he would have taken a lease of Rs 4,050,00 where its earlier market value is mere Rs 3,510,000

Suppose USD  again stabilize at 130.. my friend will give up paying the lease rentals and allow the leasing company to take back the vehicle and again go for a new lease with another company ..this will make asset values fluctuate

Neither Banks, nor NBFIs individually see or like to see this view..
but the independent regulator has to consider these..That is why Banks and NBFIs have to be regulated and supervised by some one else..

[Future123Active Member]

Very good analysis and eg YK. +++

We don't have to really worry if we are holding good finance companies like CFIN, LFIN, CDB and VFIN.

LFIN already diversifying into other sectors like property mortgaging and business loans.
VFIN has many upper middle class customers who may be able to afford to pay 30% anyway.

Just imagine if you are buying a car for Rs. 4 million without investing a single cent. It's highly risky and your example shows it very well.

Some poor people who might want to buy three wheelers or DIMO batta will be affected.

Finance companies profits will not go down as they have enough leases given before. The growth might slow down a little for sometime but good companies will always find other segment of the market. Eg: housing loans, educational, business development, working capital loans

[yellow knifeTop contributor]

We often compare financial ratios and other published data. But there are other unpublished data you have to dig out. Let me just dig out some of my findings with the impact of CBSL announcement of 70% upper ceiling


Lets take one simple example Bajaj Three-wheeler. Remember the market dictum


Higher the risk Higher the rewards



but three wheel leasing is an exemption where you get higher the rewards lesser the risk. Three wheel owners earn and pay. So their non payment level is low. and second hand value of the vehicle is guaranteed. but leasing companies charge a higher interest on lease



You can call and get information about leasing aspect on three Wheeler from respective NBFIs as if you are going to buy a wheeler. Thus researchers become mystery shoppers.



A bajaj three wheeler ( modified ) price is Rs 538,000



This is the practice of three wheel leasing until yesterday night.



PLC.N

You have to pay a down payment of Rs 75,000 and in addition to that you have to pay 16,500 for transportation from Magampura Harbour and other relevant charges.



75,000/538,000 = 0.13

That means 13% you have to fund


So the Leasing ceiling is 86%



So you can clearly see 70% margin will negatively impact on three wheel leasing. A person who is asked to fund 75,000 himself is now asked to fund 161,400 himself.




If you compare the same with other leasing companies like CDB, LB Finance, Vallibel Finance, Orient Finance etc you will find the customer has to pay only Rs 46,000 initially and that include Magampura transportaion, registration etc


So customers are used to leasing of


46,000/538,000 =0.08




That means those who used to grab business with 92% leasing now has to meet the ceiling of 70%

Now compare yourself out of the total lease portfolio how much is belonging to three wheeler.. Neither from annual reports nor from mystery shopping I could collect such information. If you have such information you can predict to what extent 70% margin will hit




Anyway for those who only look at annual reports and compare financial data I would recommend to look at Tender Notice in National week end papers by NBFIs and evaluate the number of second hand three Wheeler on forcible sale.






With the 70% margin drastic decline on revenue of small players of leasing and NBFI sector can expect. Small NBFIs are highly depending on three wheeler s.

[Future123Active Member]

This is due to the election promises. Reduction in duties of small cars and reduction of fuel prices tempted people to go for more leases. Due to the lease limitation SME sector and small guys will be affected. I can remember one election advertisement where a couple go by motorbike and it starts to rain. The man says if we get the green party we can buy a car. Now many people can't think of a car due to currency depreciation and lease restriction.

Finance companies valtath vade duna. What is next? Tile sector? Aluminium? Hotels? Hospitals?
Earlier JKH ekata dune? then blue chips?

No sign of mega bull run as people expected and 10,000 points also a dream.

Best time to go for export companies and food sector. Ekatath vade dunnath ivarai.

[yellow knifeTop contributor]

What will be the impact of NPL with 70% ceiling on vehicle leases

First we will look at NPL calculation

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[yellow knifeTop contributor]

Definition of NPL

DEFINITION of 'Nonperforming Loan - NPL'

A sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days. A nonperforming loan is either in default or close to being in default. Once a loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If the debtor starts making payments again on a nonperforming loan, it becomes a reperforming loan, even if the debtor has not caught up on all the missed payments.

[yellow knifeTop contributor]

So the calculation is

Non Performing Loan ratio % = Non Performing Portfolio
                                                  Gross Portfolio

Suppose new leases are not taking place as earlier and at the same time old matured leases are being settled Gross Portfolio figure comes down.

yet if the Non Performing Portfolio remains constant then NPL ratio should go up as a result of 70% ceiling on short term.

However I too agree with quality lending in the long term NPL will come down..

Therefore now accountants are not worried about NPL but on impairment

[Future123Active Member]

My view is this:
1) Net profit won't decline since a lot of new leases already given out for longer period like 5 years. Hence many companies will maintain the profits as earlier
2) The growth will slow down temporarily until Finance companies find new avenues of income
3) No change in NPL immediately but NPL will improve in the medium term
4) Already some companies stared looking in to other segments. Eg: LFIN advertising on property mortgage. This is a positive sign.

There is no need to worry too much since this is a temporary measure by the government. Good companies will sustain growth and look in to other lending segments.

[BackstageTop contributor]

Sorry to go off topic, but I find it amazing that YK hanging out close to the North Pole, is figuring out how much the transport costs from Magampura to Colombo are. What a man !

[yellow knifeTop contributor]

Regarding the 70% ceiling who will get the worst effect

I think small finance companies and  bajaj three wheeler

will it not affect Indian vehicle manufacturers?

If so what will Indian involvement with the India friendly government...

so i think this will be a short time measure taken until forex stabilize...

[guruji]

May be but when will forex stablise ,sri lanka has gloomy picture,, exports going down,,,so we need long term plan,,not just patch work