Dec 06, 2012 (LBO) – Sri Lanka’s non-bank lenders should borrow abroad using newly relaxed rules to help boost resources available for investment, Central Bank Governor Nivard Cabral said. “We would encourage you to access foreign funds, as well,” Cabraal told a forum of top finance company executives in Colombo this week.
“Some of you have been accessing foreign funds in order to buttress your own capital – to buttress your Tier II capital. And we would like to encourage that situation in the future as well.”
Sri Lanka’s licensed finance and leasing companies which had asset of 564 billion rupees by end September 2012 and accounted for 6 percent of total financial sector assets plays in a sub-prime market just below commercial banks.
They fund investments through leasing, hire purchase, housing mortgages and gold-backed loans.
Cabraal said Sri Lanka needed greater savings and investment to keep economic growth high at around 8.0 percent.
“Domestic investment has also increased to about 30 percent,” Cabraal said. “As you know Sri Lanka has a perennial difficulty about savings not been sufficient to promote the growth that we have.