HDFC Bank of Sri Lanka changes its traditional business model and enters into new areas

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Sri LankaHDFC Bank of Sri Lanka, the premier housing Finance institution in the country was able to change its traditional business model by expanding its scope through further diversification into new areas of business while long term housing finance will remain its core business.

This change in model focused on Small Business Loans, Micro Finance, Education Loans and Leasing. This range of new products has widened the scope of the portfolio. The micro credit and SME credit lines have effectively leverage HDFC’s past experience in working with rural and urban populations for more than 30 years since the bank is more focused in providing housing finance to low and middle income segments in the country.

The Bank has made use of Business Development Assistants across the country to expand the Micro Finance activities. As at end of 1Q 2014, the Bank has granted advances among 2100 Borrowers to the value of LKR 152 Mn to various sectors in micro category. The Bank introduced a unique mobile banking concept to the country in 2008 which has widened the operational scope far beyond the physical limits of the branch network and has enabled the Bank to directly access thousands of customers located in the rural interior. The mobile units that are managed by Business Development Assistants target the SME and micro business sectors to deliver highly personalized value added services directly to their door step, gaining HDFC a competitive advantage. This model of service delivery has also contributed towards significantly reducing risk factors associated with vulnerable groups due to direct contact and knowledge about customers. At the end of the last financial year the bank has 130 Business Development Assistants who travel to customers doorsteps daily.

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