The FHA pioneers in treating Sri Lanka towards financial inclusion
By Roshan Abeygoonewardena
The Finance Houses Association of Sri Lanka (FHA), as the apex body of 39 Regulated Finance Companies registered with Central Bank of Sri Lanka (CBSL), plays an important role in the finance and banking sector of Sri Lanka. The association acts as the mediator to the Non-Banking Financial Institutes (NBFI) sector and is driven by its passion to facilitate financial inclusion in Sri Lanka which is vital for any country to achieve a sustainable economic development. For 62 years, the FHA has been a key influencer for Sri Lanka’s economy by guiding its member companies and representing them at all times.
The FHA’s contribution to the NBFI sector
The FHA is actively engaged in creating a positive vibe about RFCs, which are under the regulation and supervision of the CBSL, while holding them intact with solidarity. The association continues to encourage people to embrace RFCs and points out the anomalies related to Non-regulated Finance companies, making sure that people turn away from them. RFCs are strictly regulated by the CBSL by enacting key acts such as Finance Business Act and Finance Leasing Act. The FHA has also taken a great stride forward to facilitate self-regulation among its members including enhancing ethical practices, monitoring malpractices in its efforts to uplift the NBFI sector. It continues to shelter all its member companies and enable them to thrive within the financial system of Sri Lanka.
The FHA continues to enhance financial literacy
The FHA has clearly identified that the financial literacy is vital to stay competitive in this industry, so has constantly come up with training sessions to empower the employees of Finance companies with knowledge, making sure that they keep on learning and contribute to this industry in an impactful way. Bearing it as a primary responsibility, the FHA continues to work in line with CBSL while representing the NBFI sector in discussions with the Central Bank, the Commissioner of Motor Traffic, Ministries and Chamber of Commerce.
It also provides a Legal Circle for Legal Officers of member companies to discuss common legal issues, suggest amendments and improvements to the present laws and administration of justice and take concerted action. It is endowed with legal and financial expertise to drive the NBFI sector while adhering to corporate values and ethical practices. The association continues to stick to the fundamentals that helped it reach this far amidst many challenges and remains buoyant in being able to overcome them successfully.
The potential of NBFI sector
To delve deeper into NBFI sector, it represents companies of all sizes, ranging from small, medium to large scale, as well as national and regional. Each company plays a vital role in the segment of the economy in which it operates irrespective of the size and scope. Despite the challenges in the recent past, the sector has expanded up to 1358 branches making sure that it reaches out to the public and facilitate them with a trusted service. Every batch of 14,900 people of the population is provided with a Non-Banking Financial Industry branch, which demonstrates the expansion of this industry.
NBFIs provide financial services to the citizens at the grass root levels which is a segment continuously forsaken by the banking sector. NBFIs also enhance the economic growth of the poor through finance leasing and Loans. NBFI sector has largely contributed to the betterment of the country and the most recent being, approximately Rs. 16.6 billion was paid in the last financial year in the form of direct taxes. Alongside the above contribution to the nation, NBFIs as an industry has made an enormous impact on the living standards of the people and per capita income of the country.
History of the FHA
The FHA is the successor of The Ceylon Hire purchase & Finance Association, founded in 1958. The association was formed to discuss the emerging problems in an unregulated industry at that time. The Association was successively renamed as The Finance Houses Association of Sri Lanka (FHA) in 1986. In the course of its history of over 62 years, the FHA has grown in form and stature to discharge a broad range of activities, expanding its original objectives.
The writer is the Chairman of the FHA with 25 years of experience in finance industry.
- Roshan Abeygoonewardena, Chairman of The Finance Houses Association of Sri Lanka