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

• 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)

Introduction

History of Sri Lanka

1505

Ruined by Kings ….

1658 Dutch took over Sri Lanka.

1796 British took over Sri Lanka

1948 4th February 1948 Sri Lanka achieved independence

1972 Ceylon Sri Lanka

Portuguese traders landed.

• 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).

Geography and Climate 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 11.2 %» Industry 29.3 %» Services 59.5 %

Economy of Sri Lanka

• Life Expectancy 74.9 Years

• Literacy Rate 91.9 %

Some Indices…

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

RUBBER PLANTATIONS

COCONUT PLANTATIONS

NATIONAL SANCTUARIES IN SRI LANKA

SRILANKAN FOOD

SRILANKAN CULTURAL EVENTS

SRILANKAN TROPICAL FRUITS

Bank of Ceylon

Bankers to the Nation….

• 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”

Bank of Ceylon

• VisionBankers to the nation.

• MissionCustomersFoster most rewarding relationship with trust and reliability for our customers, exceeding their expectations

StaffWe offer our staff, recognition and rewards to be the best team of achievers in service excellence

OwnersAs per expectations of our owners, be a catalyst in national development, with profitability

SocietyExtending banking service to larger society as a beneficial beacon in the country.

Corporate Philosophy of Bank of Ceylon

Business Highlights• Largest Commercial Bank in Sri Lanka

• Expanded the Bank’s operations to 1, 029 service points via Island-wide 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”

Prime Customers

Corporate Customers

Retail Customers

Bankable Customers

Un Bankable Customers

Commercial Loans

Micro Credit / Finance

Vulnerable non- poor

Middle income

Wealthy

Economically poor

Poorest of the poor

Catering the target segment…

PAMP

NCRCS

Fisheries Loan

Schemes

Self Employment

Development

Credit Schemes Plantation

Sector Credit Schemes

New Comprehensive Rural Credit Scheme (NCRCS)Credit facilities entertained for the following crops

Pulses: Cowpea, green gram, blackgram, soya, maize,kurakkan

Oil seeds: Ground seeds, gingelly, sun flower

Root & tuber: Potato, sweet potato, kiri ala, manioc

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)

SeasonNo. 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 SchemesScheme 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 10.01Estate Sector Self Employment Credit Scheme

192 9.5

SED 46,953 2,976.5Self Employment Scheme to purchase Three wheelers

2,835 176.6

Horticulture Loan Scheme

15,945 2,821.05

Awakening North 980 160.0Nagenahira Navodaya 276 40.86Total 67,233 6,194.52

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

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

The way forward….

Being the “Bankers to the Nation”….

BOC looks forward towards the Development of the country…….