Kanrich Finance to raise Rs.2bn via private placement

• Move aimed at fulfilling finance firm’s core capital requirement 
• Minimum core capital of a registered finance company should be Rs.2bn by Jan. 1, 2021

Kanrich Finance Limited (KFL) will raise Rs.2 billion capital through a private placement, in order to fulfil the core capital requirement by the extended deadline of December 31, 2020. 

The Central Bank stipulates, from time to time, the minimum core capital the financial institutions need to maintain and accordingly, the minimum core capital that a registered finance company should maintain after January 1, 2021, is Rs.2 billion. 

Last week, the Central Bank granted the approval to Kanrich Finance Limited to issue ordinary voting shares and non-redeemable, non-cumulative preference shares. The private placement plans to raise Rs.1 billion in ordinary shares and a further Rs.1 billion in preference shares, which together, will bring the core capital close to Rs.3 billion.

Incorporated in 1971, Kanrich Finance was relaunched in 2010 and within a period of six years, the company managed to increase its asset base from Rs.600 million to Rs.12 billion and expanded a single location company into a finance company, with 36 branches and over 1,000 employees. 

The company was also awarded as the Fastest Growing and Emerging Finance Company and Best Micro Finance Service Provider in Sri Lanka, during the financial years 2014/2015/2016 consecutively, at the Global Banking and Finance Review Awards. 

The company has a diversified lending portfolio, comprising of leasing, micro leasing, microfinance, pawning and consumer loans. Currently, the company is concentrating mainly on lending in pawning and will start diversifying again, once the share issue is complete.  Stepping on its 50th anniversary, the company will complete the share issue before the end of the year and is hopeful that the current economic climate would also improve by then and help the company in its growth path.