FHA ready to help TFC job losers | Sunday Observer

FHA ready to help TFC job losers

Roshan Abeygoonewardena
Roshan Abeygoonewardena

The Finance Houses Association (FHA) is ready to help employees of The Finance Company who lost their jobs due to the closure of the company, if they apply for employment, said FHA Chairman Roshan Abeygoonewardena on the sidelines of a media forum on ‘The significance of the Non-Banking Financial System on Economic Growth in Post Covid-19 Sri Lanka’ on Wednesday.

The representatives of the Association, a mediator for the non banking financial (NBFIs) sector, said they are all out to help the employees of finance companies, whose licence has been terminated, if they seek employment from member firms.

“It is pathetic that the regulator could not take timely action to prevent the closure of TFC, the oldest finance entity in the country. The measures taken by the regulator failed to bear fruit leading to the closure of the pioneering institution,” Abeygoonewardena said, adding that FHA has made recommendations and has strongly urged the Central Bank to take action against unregistered finance companies which are fleecing the public promising fabulous interest rates.

FHA members said they want to make a clear distinction between the unregulated? finance companies and regulated finance companies which have maintained an unblemished record for several decades serving those at the bottom of the pyramid, the backbone of the economy.

“The regulated finance companies are being looked at through? the same lense due to the nefarious activities of unregistered entities that hoodwink the hapless public with bogus pledges,” FHA Immediate Past Chairman Krishan Thilakarathne said.

However, when asked about the recent killing of a trishaw driver by employees of an unregistered leasing company for failing to settle the installment, the FHA representatives passed the ball on to the court of the regulator saying they should have acted before the horse had bolted.

“We condemn the killing of the trade union leader which is totally unwarranted but cannot do anything beyond it since it’s not within our mandate,” said representatives of FHA which has played a pivotal role since 1958? in safeguarding the public from corrupt practices of unregulated finance companies and contributing to the development of non-banking finance sector.

FHA members made it clear that ceasing or repossession of vehicles by a finance company should be done only within the provision of the law.

Any action outside the legal provisions is unethical.

?“Repossession of vehicles should be the ultimate resort after giving sufficient time for the lessee to settle the outstanding funds with reminders,” FHA Council Member Niroshan Udage said.

The Association representatives expressed displeasure over the exclusion of NBFIs from the Saubhagya loan scheme introduced by the Central Bank and the Government to support pandemic-hit businesses.

“NBFIs which service over three million depositors, mostly those at the bottom of the pyramid enabling them reach bankable level, have been excluded from the refinance facility which could have been passed on to SME sector enterprises who account for a major share of economic growth,” Udage said.

NBFIs were the first to be affected by the pandemic and also the first to come out from the crisis.

“We did not expect a fast turnaround by NBFIs which have withstood the turbulent times well, compared to the banking sector.

We are confident the sector will recover fully provided there is no second wave of the killer disease,” FHA members said, adding that the Association had offered over 500,000 moratoriums ranging from three to six months.

Responding to the impact of import restrictions on the sector, representatives said NBFIs not only provide funds to purchase vehicles but also for people to facilitate mortgages.

FHA said it was surprised by the redemption of assets during the height of the crisis which was unprecedented. Those who had mortgaged used the money to redeem rather than park them in banks which offered low returns.

FHA comprises 39 members of which 31 are listed entities. The sector which accounts for over 1,350 branches? contributed Rs. 16 billion to State coffers by way of direct taxes in the past financial year.