The Bank of Ceylon (BoC) will be opening 31 more branches shortly in the North and the East, each focusing on small and medium enterprises . Bank Chairman Gamini Wickramasinghe told the Business Times there was a huge demand for banking services in the post-conflict period. He said that, the Sri Lankan government expects more foreign exchange to flow into the country to develop the devastated provinces, especially from the Sri Lankan Diaspora.
The openings will include more branches in each province to provide microfinance services, as well as nine ATMs in the North, seven ATMs in the East, and 11 mobile units.
He disclosed that the bank intends to motivate Sri Lankan expats to leverage their contributions towards national development through remittances.
A special focus area would be Europe, he said. Highlighting the macroeconomic importance of worker remittances, Mr Wickramasinghe said that a major portion of Sri Lanka's trade deficit was financed by remittances.
The BoC chairman said that the grassroots savings groups the bank has set up across its network will provide a platform to serve the microfinance sector. The bank provides small farmer credit, livestock credit linked to insurance, micro enterprise credit, inland marine fisheries credit, and assistance for milk production. He said that the bank took an initiative to send 10 milch milk cows to the north by train for farmers in the area as a goodwill gesture.
Plans are under way to open 10 more BOC branches in each province to provide microfinance services.
He noted that Sri Lanka’s microfinance sector faces both opportunities and challenges going forward.
However, he pointed out that there were weaknesses in this sector including substandard portfolio management and financial sustainability, a poor level of microfinance specialization, and widespread public-sector involvement in credit delivery.