Agricultural & Rural Finance of Bank of Ceylon D M Gunasekara CEO / General Manager Bank of Ceylon Contents of Presentation…. • • • • • • • • Country Profile – Sri Lanka Economy of Sri Lanka About Bank of Ceylon Business highlights Microfinance activities Challenges & solutions Success stories Q&A Country Profile Sri Lanka Democratic Socialist Republic of Sri Lanka A pearl in the Indian Ocean…. Sri Lanka National Flag Introduction • Location Situated in the Indian Ocean Just off the Southern Coast of India • Population 20,277,597 • Business Capital Colombo • Legislative Capital Sri Jayawardenapura Kotte • Country Area 25,332 square miles (65,610 sq km) • Coastline 833 miles (1,340 km) • Highest Point Mount Pidurutalagala (2,524 m) History of Sri Lanka 1972 Ceylon Sri Lanka 1948 4th February 1948 Sri Lanka achieved independence 1796 British took over Sri Lanka 1658 Dutch took over Sri Lanka. 1505 Portuguese traders landed. Ruined by Kings …. Geography and Climate of Sri Lanka • Mainly consists of flat lands. • Central part of the country features with mountains and step sided river canyons. • Tropical climate. • Most of the rain in the Southwest falls from April to June and for the Northeast October to November. • Sri Lanka's average yearly temperature is around 86°F to 91°F (28°C to 31°C). Economy of Sri Lanka The major industries in Sri Lanka • Processing of Rubber, Tea, Coconut, Tobacco and Other Agricultural commodities. • Apparel • Tourism • Cement Sri Lanka's main exports • Apparel • Tea • Spices • Gems & Jewellery • Coconut products • Rubber Products • Fisheries products Economy of Sri Lanka • GDP (at Mkt Price) US $ 59 Bn • Economic Growth 8.3 % • Annual average inflation 6% • Per Capita GDP US $ 2,836 • Unemployment rate 4.2% • Sectoral Composition of GDP » Agriculture » Industry » Services 11.2 % 29.3 % 59.5 % Some Indices… • Life Expectancy • Literacy Rate 74.9 Years 91.9 % National Beauty & Heritage Kingdoms of Anuradhapura & Polonnaruwa Ruwanweli Maha Seya Polonnaruwa Gal Viharaya (Stone Temple) SRI DALADA MALIGAWA - KANDY SIGIRIYA (LION'S ROCK) SHRINE MADU NALLUR KOVIL KATARAGAMA DEVALAYA WATERFALLS IN SRI LANKA Baker's Fall Dunhinda TEA PLANTATIONS COCONUT PLANTATIONS RUBBER PLANTATIONS NATIONAL SANCTUARIES IN SRI LANKA SRILANKAN FOOD SRILANKAN CULTURAL EVENTS SRILANKAN TROPICAL FRUITS Bank of Ceylon Bankers to the Nation…. Bank of Ceylon • Established in August 1939. • The premier state bank in the country • The first corporate entity in Sri Lanka to achieve a Rs. one trillion balance sheet. • “One Ten Twelve” Corporate Philosophy of Bank of Ceylon • Vision Bankers to the nation. • Mission Customers Foster most rewarding relationship with trust and reliability for our customers, exceeding their expectations Staff We offer our staff, recognition and rewards to be the best team of achievers in service excellence Owners As per expectations of our owners, be a catalyst in national development, with profitability Society Extending banking service to larger society as a beneficial beacon in the country. Business Highlights • Largest Commercial Bank in Sri Lanka • Expanded the Bank’s operations to 1, 029 service points via Islandwide network • 840 foreign correspondents • ‘AA+(lka) - National Long-Term Rating stable outlook by Fitch Ratings Lanka Ltd • Over 10 Mn Customer Account Base Island wide Service points Service Points 1,029 Our strategies towards Microfinance • The basic criterion to the microfinance – Socio economic background – Income level • Solidarity group mobilization and poverty alleviation • Micro Credit Programmes • Encourage self employment • Reaching out at grass root level (Bare-foot Banking) BOC – “A friend in need” Wealthy Commercial Loans Prime Customers Middle income Corporate Customers Vulnerable non- poor Retail Customers Micro Credit / Finance Bankable Customers Un Bankable Customers Economically poor Poorest of the poor Catering the target segment… New Comprehensive Rural Credit Scheme (NCRCS) Credit facilities entertained for the following crops Pulses: Cowpea, green gram, blackgram, soya, maize, kurakkan Root & tuber: Potato, sweet potato, kiri ala, manioc Oil seeds: Ground seeds, gingelly, sun flower Vegetables: beans, beet root, bitter guard, brinjal, cabbage, capsicum, carrot, knoh khol, ladies’ fingers, leeks, luffa, pumpkin, radish, snake guard, tomato etc. New Comprehensive Rural Credit Scheme (NCRCS) Season No. of Loans Amount granted Rs. (Mn) 2011 Yala 11,066 991.09 2011/12 Maha 27,557 2,632.73 2012 Yala 8,960 953.83 Other supportive schemes • “Govi Shakthi” – Infrastructure support to farmers • Self Employment Promotion Initiative Programme (SEPI) • Poverty Alleviation Micro Finance Programme • Agro Livestock Development Loan scheme • Fisheries Sector Loan scheme • “Shookshma” – Encourage Self Employment & SMIs Plantation sector Development Credit Schemes Plantation sector Development Credit Schemes Scheme No. of loans Amount granted (Rs. Mn) Kapruka Loan Scheme 923 168.84 Tea Development Project Loan scheme 161 131.29 Smallholder Plantation Entrepreneurship Development Pgm. 217 29.31 Second Perennial Crops 30 20.0 Govi Shakthi 7,512 1,782.01 Total 8,843 2,131.45 Self Employment Development Credit Schemes Scheme No. of Loans Amount Granted (Rs. Mn) SEPI 52 10.01 Estate Sector Self Employment Credit Scheme 192 9.5 SED 46,953 2,976.5 Self Employment Scheme to purchase Three wheelers 2,835 176.6 Horticulture Loan Scheme 15,945 2,821.05 Awakening North 980 160.0 Nagenahira Navodaya 276 40.86 67,233 6,194.52 Total Challenges Solutions Obligations to fulfill the stakeholder’s requirements. Focusing credit schemes towards contribution to the development of the country. Increasing competition of private players. •Flexible options to the customers •Doorstep banking •Mushroom finance companies •Loyalty building programmes. •Introduced “Barefoot Banking” concept. •Affordable repayment packages Lack of financial literacy of rural community Conducting island wide Financial Literacy Programmes Post harvest issues on agricultural commodities •Prices not assured •No proper storage facilities •Encourage Forward Sales Contracts. •Focusing the food security concepts •Financing to construct “Sylos” Challenges Solutions Customer skills not properly identified •Conduct skill development programmes with the assistance of VTIs. • Conduct Entrepreneur Development Programmes Scattered rural area customers Conduct village level “Group Lending” programmes and formed unity customer base. Omission of Societies below the poverty line. Developed the Poverty Alleviation Micro Finance Project (PAMP) Success Stories…. • Lakbima Rice Mills • Ms. Renuka Damayanthi • Mr. Kumaratheepan (Photo Studio) • Lending to ex-combatants – Saloon The way forward…. Educating customer segments • • • • • Financial Literacy programmes Awareness programmes on Poverty Alleviation Solidarity Group mobilization Programmes Entrepreneur Development Programmes Awareness Programme on banking literacy to the Ex-LTTE combatants The way forward…. Entertain new clients –Focusing less developed rural pockets –Strengthening the rural service points –Further strengthening SHGs Being the “Bankers to the Nation”…. BOC looks forward towards the Development of the country…….