LOLC Development Finance PLC

ICRA Lanka Withdraws Rating of LOLC Development Finance PLC

InstrumentCurrent Rated Amount (LKR Mn) Rating Action
Issuer rating         N/A [SL] A- (Stable); Withdrawn

Rating action

ICRA Lanka Limited (“ICRA Lanka”) has withdrawn the Issuer rating of [SL] A- (pronounced SL A minus) with Stable outlook assigned to LOLC Development Finance PLC (“LDFP”/ “the Company”). The withdrawal is as a result of termination of rating agreement(s) entered into by LDFP with ICRA Lanka, pursuant to the decision by ICRA Lanka to cease its business operations in Sri Lanka.  

The termination of the rating agreement(s) is as per Rule 88(b) of the Credit Rating Agency Rules promulgated under the Securities and Exchange Commission of Sri Lanka Act No. 19 of 2021 (the “SEC Act”).

About the Company:

BRAC International established its Sri Lankan operations as an NGO in 2004 to serve the tsunami affected community in southern and eastern provinces. Subsequently, along with LOLC as a joint venture, it acquired Nanda Finance PLC (incorporated in 1961) to extend microfinance. In 2014, the Company became a wholly owned subsidiary of Commercial Leasing & Finance PLC (CLC, 99% owned subsidiary of LOLC), when BRAC International divested its holding. In May 2017, LDFP raised additional capital amounting to LKR 1.3 Bn by way of a rights issue which was fully subscribed by LOLC. Post the rights issue, LOLC became the largest shareholder with a 55.6% holding, while CLC held 44.3% share. LDFP is a licensed finance company and it is in the business of providing group microfinance, micro lease and individual loans to its customers. Post the amalgamation of LOFC with CLC, LDFP’s major shareholder is LOLC Ceylon Holdings PLC (55.55%) while LOLC Finance PLC held 44.34% as on March 31, 2022.

On August 24, 2022, the Company announced that it has received approval on August 24, 2022 from the Monetary Board of the Central Bank of Sri Lanka for the amalgamation of the LOLC Finance PLC – LOFC with LOLC Development Finance PLC subject to complying with requisite regulatory and statutory requirements. The remaining amalgamated entity will be LOLC Finance PLC (LOFC).

Rating history for last three years:


Subsidiary of ICRA Limited

Level10, East Tower, World Trade Center, Colombo 01, Sri Lanka
Tel:+94 11 4339907;Fax:+94112333307;

© Copyright, 2022 ICRA Lanka Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA Lanka.

ICRA Lanka ratings should not be treated as recommendations to buy, sell or hold the rated debt instruments. ICRA Lanka ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA Lanka rating is a symbolic indicator of ICRA Lanka’s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website or contact ICRA Lanka’s office for the latest information on the outstanding ICRA Lanka ratings.

All information contained herein has been obtained by ICRA Lanka from sources believed by it to be accurate and reliable, including the rated issuer. ICRA Lanka however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA Lanka in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information.

ICRA Lanka does not take any responsibility for accuracy of material/documents prepared or published by other parties based on this document. All ICRA Lanka official rating rationales are prepared in English and external parties may present or publish translated versions of the same. Readers are henceforth advised to refer to the ICRA Lanka’s official rating rationale in the event of any inconsistency found in such documents.

ICRA Lanka or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA Lanka shall not be liable for any losses incurred by users from any use of this publication or its contents.