LOLC takes its highly successful micro-lending model to Central Asia and further deep into Africa

• Makes new investments Tajikistan, Malawi and Tanzania expanding global micro-lending domain 
• Move cements Group’s position as world’s largest multi-currency, multi-geographic microfinance service provider
• LOLC first entered into global MSME arena in 2007 and since then its global presence has grown exponentially 

LOLC with its robust MSME-based business model is expanding its global footprint with three parallel investments being made in Tajikistan in Central Asia as well as Malawi and Tanzania in East Africa.

LOLC enters Central Asia with its maiden investment in the region through the acquisition of 75 percent stake in a company known as Karat, (LLC LTMKh and LLCTMKhL) with a license authorising them to conduct micro lending and gold loan business in Tajikistan. 

Tajikistan, with a population of 9.5 plus million people and a lower GDP Per capita of US$ 859 presents tremendous potential for rolling out the LOLC’s highly successful MSME model that specialises in serving bottom-of- the-pyramid clientele. LOLC will increase its equity stake in the company to 100 percent by the year-end.  

Meanwhile, the LOLC’s successful microfinance operations in Nigeria and Zambia have provided the impetus for the Group to further deepen its presence in the African continent through strategic acquisitions of two microfinance companies in Malawi and Tanzania. 

In Malawi, the Group acquired 100 percent equity stake of Express Credit Limited, while in Tanzania the Group secured 96 percent stake of Tujijenge Tanzania Ltd.  

Malawi with its population of 19 plus million people and low GDP per capita of US$625 and Tanzania with 58 plus million people and GDP per capita of US$ 1,077, are both deemed to be highly conducive markets for MSME business, thus paving the way for rapid growth and long-term value creation for the Group. After creating a strong and successful microfinance and SME model in Sri Lanka, LOLC entered the global MSME arena in 2007 with a maiden investment of just US$ 0.5 million to acquire 18 percent stake in PRASAC Micro Finance Institution in Cambodia. 

The Group thereafter acquired 70 percent controlling interest of PRASAC over the next 9-year period. Under the stewardship of the LOLC Group, PRASAC has continued to register exponential growth over the years. 

The phenomenal success of this investment was further iterated when the LOLC Group divested its stake in PRASAC to South Korea’s largest commercial Bank - Kookmin Bank, with the company being valued at US$ 1.1 billion for the second tranche.

LOLC has achieved further success in Cambodia by replicating its MSME business model through LOLC Cambodia, the Group’s second investment in the country. Today, LOLC Cambodia with a lending portfolio of US$ 900 million and US$1 billion in assets, is ranked as the fourth largest microfinance institution in the country and also holds the distinct honour of being among the top two most profitable microfinance entities in Cambodia, second only to PRASAC. LOLC’s greenfield operation in Myanmar, LOLC Myanmar Micro Finance Ltd too remains one of the leading microfinance operations in that country. 

Having built a strong lending book and produced consistent profit growth, notwithstanding recent challenges owing to political uncertainty and the COVID-19 pandemic, LOLC Myanmar Micro Finance Ltd has cemented its position as the fourth largest player in Myanmar’ s micro finance sector in less than 6 years.  

The LOLC Group’s more recent microfinance investments in Indonesia, Philippines and Pakistan too are now recording turnaround results, supported by a steady buildup of MSME portfolios and assets.  Leveraging its success in East Asia, the LOLC Group expects to further grow its microfinance bandwidth across the Central Asia, as well as in the Indian sub-continent, where several potential locations have already been earmarked. 

Similarly, the new investments in Malawi and Tanzania are expected to set the course for the Group to build scale in the African region.  Commenting on the significance of LOLC’s global expansion strategy, LOLC Group Deputy Chairman Ishara Nanayakkara said, “Expanding our microfinance model globally is not only about pursuing our commercial ambition, but doing so in a sustainable and socially responsible manner to deliver tangible benefits to those communities at the bottom-of-the-pyramid, who are often overlooked by the formal financial system.”

“I believe the impact we are creating in Sri Lanka, Cambodia and Myanmar, speaks volumes about how our business model is doing just that. How we are holistically responding to the needs of these communities by promoting financial inclusion, empowering women and reducing socioeconomic disparity, in turn triggers broader economic change.  It is this formula which has delivered socioeconomic progress for the community and continues to bring commercial success for the Group, that we are looking to replicate through our global expansion strategy,” he added.