Monday, February 15, 2010


Nextfinance Limited one of the oldest finance companies in the country plans to raise Rs 180 million through a share issue. The Nextfinance is also in the process of listing the company in the Colombo Stock Exchange by mid 2011.

The company’s huge expansion program includes setting up three branches during the year, Nextfinance Limited Chief Executive Officer Dammika Siriwardhana told Daily News Business.

“There is a healthy increase in the level of confidence among the domestic investors and this has a positive impact on registered finance companies in attracting funds.

The country’s main focus for the next five years would be on economic development and being a registered finance company, we strive to be a major contributor in this process,” he said.

The end of war and the low interest regime has provided impetus for the investor sector to grow and the high performance of the stock market too has fuelled the growth in the sector. This indicates that the country’s business strategies are on a clear path, he said. The confidence level of the domestic investors was at a low ebb due to failed unregistered companies carrying out finance business.

However, the situation is now changing for the better and liquidity levels are improving, he said. “The company will introduce new products and services of fee and fund based activities. We target to generate funds through equity to improve liquidity problem and to reduce the dependability of fixed deposits. We need to be innovative in catering to the niche market as traditional financing products have limited demand.

There is potential for a registered finance company to capture this market,” Siriwardhana said.

The company plans to launch property homes, to deal with property sales to improve our fee income.

Steps will be taken to capitalize the improvement in the real estate market by launching two projects in Veyangoda and Wellawaya. There are a few other real estate projects in the pipeline, he said. The reduction in deposit and lending rates offered by the commercial banks has positively contributed for an increase in the demand for the financial instruments offered by the registered finance companies.

This has created a shift in the savings in the commercial banks to finance companies thereby enhancing the demand, he said.

“We are willing to take a reasonable and calculated risk as there is huge investment potential in the war affected areas.

The development drive in the North and the East provinces in the sectors such as infrastructure and telecommunication have created opportunities for investments.

This has enabled the finance companies to play a role in the leasing and hire purchase requirements,” he said.

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