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The world’s most global inclusive finance platform originating from Sri Lanka is transforming global communities


Success didn’t happen overnight for U Thant Zin, nor did it come easily. U Thant Zin is a paddy farmer in Auglan, Myanmar. For smallholder farmers like him, the lack of collateral and expertise in the agricultural sector remain significant barriers to obtaining financing. Defying the odds, LOLC Myanmar lent an agricultural loan to U Thant Zin amounting to US$ 670 in 2019. Currently, he is the proud owner of a 10-acre paddy field owing to hard work, perseverance, and multiple loans from LOLC Myanmar.

Ruth Olawepo, an owner of a clothing store, dreamt of expanding her business to other states in Nigeria and importing readymade abayas from Senegal. She decided to partner with Fina Trust Microfinance Bank Nigeria, a subsidiary of LOLC, and availed of a loan of US$ 12,000 in 2021. Since the first loan, she is now on her third cycle with the bank and the loan amount has been increased to US$ 24,000. She currently has three shops in Lagos Island Branch and also has outlets upstate.

The lives of hundreds of such aspiring individuals around the world are being transformed through LOLC’s services that promote financial inclusion. The term ‘financial inclusion’ implies having access to useful and affordable financial products and services that meet people’s financial needs. The World Bank Group considers financial inclusion as a key enabler to reducing extreme poverty and boosting shared prosperity, while the International Monetary Fund (IMF) believes that financial inclusion facilitates efficient allocation of funds among entrepreneurs, in turn, increasing aggregate output. As a result, the benefits of inclusive finance translate into higher GDP growth. For instance, Cambodia’s GDP in 2007 was US$ 8.64 Bn (Word Bank data), whereas domestic credit to the private sector as a percentage of GDP was 18.2%. Within a time span of 13 years, Cambodia’s GDP reached US$ 25.87 Bn, while domestic credit to the private sector grew to 139.6% of GDP, making Cambodia one of the fastest growing nations in the world, with an annualised GDP growth of 9.9% within this time period. During the same period, LOLC Cambodia’s gross loan portfolio grew from US$ 18.1 Mn to US$ 830.9 Mn by a CAGR of 37.6%.

Inclusive finance is critical for borrowers at the bottom of the pyramid as it gives them quick funding for entrepreneurial finance, unlike traditional finance, which is known for red tape and a slow credit financing process, with obstacles such as the borrower not being either eligible to get a loan or the lengthy loan processing times defeating the purpose of quick loans. The difference in LOLC’s inclusive finance services is that it provides quick financing, understanding the urgency of the bottom of the pyramid entrepreneurs and their lack of collateral. Committed to supporting the growth of micro borrowers, LOLC engages in continuous dialogue with borrowers and encourages significant adoption of technology to provide smaller ticket size loans. This has significantly boosted the global economies - with the elevation of per capita GDP of the population.

LOLC’s ambitious global growth and expansion have been propelled by its passion to provide inclusive finance. The group commenced operations in 1980 with ORIX Corporation of Japan, and then set up a leasing company to pioneer leasing in Sri Lanka in partnership with IFC and BOC. At the time, it was providing asset-backed financing, since it was difficult to access financing through traditional financial institutions. LOLC grew rapidly and by early 2000 adopted an inclusive finance strategy to enhance access to its array of innovative financial products for people at the bottom of the pyramid. Within a short span of time, LOLC became the largest inclusive finance operator in Sri Lanka. LOLC’s unique business methodology is also referred to in academia, as reflected by its inclusion as a case study in the INSEAD Business School’s prestigious MBA programme.

LOLC expanded its horizons outside Sri Lanka in 2007 by setting up its first operation in Cambodia. Since then it has been on a phenomenal journey, expanding globally and serving the bottom of the pyramid populations in each of its markets successfully. As of now, LOLC’s financial model is empowering communities in 15 countries. By the end of 2023, it will have a presence in 22 countries. Its largest inclusive finance target markets are in the developing countries of Asia, Africa and potentially Latin America. LOLC is positioned to cover a population footprint of over 2.1 Bn in Asia, which provides a glimpse into its powerful influence. Similarly, it has a presence in 7 countries in Africa, covering a 482 million population base. By the end of 2023, LOLC is looking to enter Latin America, which will be another breakthrough market for the group. Accordingly, the group will be the only finance house with a scale that has the ability to cover most of the addressable inclusive finance markets globally.

LOLC has implemented greater digitalisation of its systems and processes and is able to on- board customers digitally at the field level by empowering field officers with mobile devices such as tabs, thereby eliminating duplication, since the branch can access data directly from the tabs in real time. This enables field officers to also access information in real-time and take quick decisions at customers’ doorsteps, thereby enhancing efficiency internally while shortening the time taken to approve and disburse loans.

Some of the reasons for the rapid expansion of its inclusive finance operations are its efficient processes, lean operations and excellent management of cost structures, which have helped to record strong profits. This in turn lays the foundation for aggressive expansion by reinvesting profits. For instance, LOLC Zambia, a Greenfield operation in Zambia, successfully recorded profits within 12 months of being incorporated.

LOLC’s financial inclusion is not limited to credit services - it is also dominating in facilitating seamless transactions for the bottom of the pyramid customers through its Fintech iPay platform. iPay is a super-app, which facilitates customer-centric user experience in opening digital savings accounts, digital fixed deposits, and merchant and utility payments platform. As of now, iPay has been launched in Sri Lanka and Cambodia, with plans to cover more markets where LOLC’s global financial platform has its presence.

Strengthening its inclusive finance platform further, LOLC has introduced insurance solutions as one of the key financial products which support people in developing countries. LOLC has perfected the micro insurance product and incorporated it into its inclusive finance platform by providing insurance solutions that meet people’s needs to manage their credit payments. Present in Sri Lanka’s insurance space since 1999, LOLC Insurance now has operations in Sri Lanka and Cambodia, with plans to expand globally, providing 360-degree financial services for the betterment of the bottom of the pyramid segments.

The growth of LOLC has been synonymous with the shift of economic power to the emerging markets in the east, placing the LOLC Group in a first-mover position to penetrate the captive bottom of the pyramid market - by providing them with access to finance as opposed to large global traditional banks, which cater to more developed markets. Backed by its strategic vision and unique business model, LOLC has positioned itself as the largest multi-currency, multi-geography MSME platform with a strong hold on the three pillars of inclusive finance: credit, payments and insurance.