Reaching Out

Mar 15, 2010 (LBO) – Sri Lankan finance companies should reach out to rural areas which historically have been short of credit, governor of the Central Bank, Nivard Cabraal, said. Rural savers are also known to make deposits at unregulated finance companies that offer high interest rates but risk making heavy losses if the firms fail as some have done in recent years.

“That is why we are very keen that the finance companies are strong,” Cabraal said.

“That they are able to deliver credit at reasonable prices; that they are able to conduct good governance systems; that they are able to project stability and act in a responsible manner.”

Sri Lanka’s financial sector is recovering from a tight period after the collapse of unregulated institutions created liquidity problems in the entire sector as risk-averse depositors pulled out funds. “We are very keen to double the per capita of our country, access all areas that have not been accessed and then deliver this prosperity to all parts,” Cabral said.

“Finance companies will be an important delivery mechanism, a channel in delivery of prosperity in the nation.”

Cabraal was speaking at the re-launch of Commercia