One of the leading non-banking financial company, Mahindra Financial Services has implemented a strategy to make Sri Lanka a preferred market, as per The Economic Times.
Following the completion of a 58.2 percent acquisition in Ideal Finance based in Sri Lanka, the company has achieved a mark in the growing financial service market of the country. The acquisition was carried at an investment of 2 billion Sri Lankan Rupees.
In 2019, Mahindra Finance stepped into a contractual agreement with Ideal Finance. Through the agreement, it agreed to obtain a 58 percent stake by March 2021. Later, the agreement was mutually extended by both companies till September 2021.
Along with the investment in Ideal Finance, Mahindra Finance proposes to replicate its business model. It aims to create a leading financial service institution in Sri Lanka.
Ramesh Iyer, VC & MD of Mahindra Finance stated, “Ideal Finance already has a suite of financial products that they offer to the Sri Lankan consumer. These include financial leasing offerings for automobiles and farm equipment, gold loans, business loans, consumer durable loans, personal loans, etc.”
He further affirmed that the company will continue to offer these products. In addition, it will also look at offering any other financial services product considering the consumers’ requirements.
Iyer put forward that Mahindra Finance has no plans to raise their stake further 58.2 percent. He stated that Ideal Finance would look at much more than only vehicle financing.
He noted, ” The Company has a wide suite of financial product offerings like financial leasing offerings for automobiles and farm equipment, gold loans, business loans, consumer durable loans, personal loans, etc.”
Iyer emphasized that Sri Lanka has a well-regulated and mature financial service market that has been growing steadily for years. Reportedly, the Sri Lankan market has a wide array of players, namely Tata Motors and Ashok Leyland that are well entrenched in the market.
On being questioned about the company’s plan to expand beyond Sri Lanka, Iyer responded, ” We expect the market to bounce back to good growth numbers once we are over with the pandemic. Regarding other neighboring markets, our company continuously studies various opportunities as and when they emerge. So we will continue to keep our eyes are ears open for those.”, as cited by The Economic Times.
Sri Lanka-based Ideal Finance Limited concentrates on the rural and semi-urban sectors. The group is also involved with Mahindra automotive sector over the past years.
