Microfinance Industry Report SRI LANKA - Microfinance in Sri Lanka

2. Financial Sector
Sri Lanka’s financial system is comprised of a variety
of institutions which include the Central Bank of Sri
Lanka (CBSL), commercial banks, specialized banks,
finance companies, specialized leasing companies,
insurance companies, unit trusts, merchant banks,
venture capital companies, authorized primary
dealers, stock brokers and dealers, and contractual
savings institutions such as the Employees’ Provident
Fund and the Employees’ Trust Fund. These institutions
operate within the formal financial markets such as
the money market, bond market, foreign exchange
market and the equity market and are supported by
a financial infrastructure consisting of the payments
and settlement systems and an applicable legal
Table 2
framework. 5 There are also a number of rural banks,
thrift and credit co-operative societies, pawnbrokers
as well as microfinance institutions (both NGOs and
companies, collectively referred to in this report
as NGO-MFIs) in operation. In addition, there is a
thriving informal financial system which includes a
large number of moneylenders, ROSCAs, etc.
Table 2 provides a breakdown of the total assets and
deposit liabilities of the major financial institutions
comprising the financial sector.
The commercial banks dominate the financial
system. There are currently 23 licensed commercial
banks operating in Sri Lanka. Of these, the largest in
terms of assets and outreach, are the state-owned
5 Central Bank of Sri Lanka – Financial System Stability Review
2007.
Total Assets and Deposit Liabilities of the Main Institutions in the Financial System June 2007 5
Assets
Deposit Liabilities
Financial Institution Rs. bn. % Share Rs. bn. % Share
Central Bank of Sri Lanka 544.5 13.5 n.a n.a
Institutions Regulated by the Central Bank 3,111.5 77.2 1,669.3 98.2
Deposit Taking Institutions 2,459.3 61.0 1,669.3 98.2
Licensed Commercial Banks
1,964.4 49.0 1,335.4 78.5
Licensed Specialized Banks
371.6 9.2 267.0 15.7
Registered Finance Companies
123.3 3.1 66.9 3.9
Other Institutions 652.2 16.2 n.a. n.a.
Employees' Provident Fund
516.0 12.8 n.a. n.a.
Primary Dealers
53.0 1.3 n.a. n.a.
Specialized Leasing companies
83.2 2.1 n.a. n.a.
Institutions not Regulated by the Central Bank 376.2 9.3 31.1 1.8
Deposit Taking Institutions 33.4 0.8 31.1 1.8
Rural Banks
28.5 0.7 26.4 1.6
Thrift and Credit Co-operative Societies
4.9 0.1 4.7 0.3
Contractual Savings Institutions 309.4 7.7 n.a n.a
Employees Trust Fund
71.9 1.8 n.a n.a
Private Provident Funds
112.6 2.8 n.a n.a
Insurance Companies
124.9 3.1 n.a n.a
Other Specialized Financial Institutions 33.4 0.8 n.a n.a
Merchant Banks
31.3 0.8 n.a n.a
Venture Capital Companies
1.4 0.0 n.a n.a
Unit Trusts
5.2 0.1 n.a n.a
Stock Broking Companies 4.8 0.1 n.a n.a
Credit Rating Agencies 0.7 0.0 n.a n.a
Total 4,032.2 100.0 1,700.4 100.0
8 microfinance industry report - SRI LANKA