Financial inclusion requires more than access to credit; it demands trust, prudent management and an understanding of local communities.

For Mr K. G. Leelananda, Chief Executive Officer and Executive Director of LCB Finance PLC, these priorities shape the company’s approach to growth. His experience at LCBL and Sanasa Development Bank PLC informs a focus on SMEs, agriculture, micro-leasing, women’s empowerment and the co-operative sector.

As LCB Finance expands its branch network, he discusses balancing lending opportunities with credit risk, strengthening digital security and accessibility, and safeguarding depositors’ interests while navigating the challenges of Sri Lanka’s rapidly evolving financial services landscape.

Q: How is LCB Finance responding to volatility in Sri Lanka’s financial market while maintaining stability and customer confidence?

In a volatile market environment, our primary focus has been on prudent asset-liability management and strong governance. LCB Finance maintains a highly liquid balance sheet, well above the regulatory requirements of the Central Bank of Sri Lanka, coupled with a conservative provisioning policy.

We have strengthened our risk management framework and enhanced our capital adequacy ratio to absorb shocks. Most importantly, we maintain total transparency with our customers and stakeholders. Customer confidence is built on consistent service, timely fulfilment of commitments and ethical practices, which have allowed LCB Finance to remain stable even during challenging economic cycles.

Q: How do you balance lending to rural entrepreneurs and MSMEs with credit risk in an uncertain economy?

MSMEs and rural entrepreneurs are the backbone of our economy and are also at the core of LCB Finance’s mission. We balance growth with risk through a relationship-based lending model, rather than relying solely on collateral-based lending.

Our approach includes:

• Rigorous credit evaluation
• with field verification.
• Cash-flow-based assessments
• tailored to rural businesses.
• Sector diversification to avoid
• concentration risk.

Continuous post-disbursement monitoring and business advisory support.
This enables us to empower entrepreneurs while keeping our non-performing loan (NPL) ratio at a healthy level.Q: With digital financial fraud becoming a growing concern, how are you protecting customers and strengthening their awareness?

We have adopted a two-pronged strategy: technology and education. On the technology front, we have invested in multi-factor authentication, end-to-end encryption, real-time fraud monitoring systems and secure digital onboarding in line with CBSL guidelines.
Equally important is customer awareness. We regularly conduct awareness campaigns through branches, social media and SMS alerts to educate customers on phishing, the risks of sharing OTPs and safe digital practices.

Our staff are also continuously trained to detect and prevent fraud at the source. The safety of our customers’ financial information is non-negotiable.

Q: How are you expanding digital financial services while ensuring security and accessibility for rural customers?

Our digital transformation is built on inclusivity. We understand that true digitalisation must reach the village level.

We are expanding our mobile app, online payment gateway and digital loan origination system with Sinhala and Tamil language support for ease of use. At the same time, our extensive branch network provides digital facilitation points where staff assist rural customers in adopting digital services.

All digital platforms are built with CBSL-compliant security protocols, data privacy measures and user-friendly interfaces so that even first-time users can transact with confidence. Our goal is to bring the convenience of Colombo to every rural doorstep, securely.

Q: What are your key priorities for LCB Finance’s growth, and how will you safeguard depositors’ interests?

Our key priorities for the next phase are:

• • Sustainable growth: Focusing on quality portfolio growth in gold loans, SME lending and leasing.
  • Digital leadership: Becoming a fully digitally- enabled finance company.
  • Strong governance: Further strengthening our internal audit, risk and compliance functions under the guidance of the Central Bank of Sri Lanka.
  • Moving to our own building: Taking a landmark step symbolising our financial strength and long-term commitment.

Safeguarding depositors is our foremost responsibility. We ensure this by maintaining strong capital and liquidity buffers, adhering strictly to CBSL corporate governance directions, providing transparent financial reporting, and maintaining an independent and empowered Board Audit Committee and Integrated Risk Management Committee.

Every business decision we take is evaluated first in terms of depositor safety. Depositors are the foundation of LCB Finance—their trust is our greatest asset.