Founded with the strategic intent of uplifting the livelihood of every Sri Lankan, Cargills Bank has rapidly grown from every avenue within the short span of its existence.The bank has established its presence as a reliable, responsive financial services provider focused on consumer and entrepreneurial development in Sri Lanka.

The Small & Medium Enterprises & Middle Markets Banking Division at Cargills Bank plays a pivotal role in the business due to its unique business model which has positioned to support the SME community in Sri Lanka, both within its own Cargills Eco System and as well as outside.

In an interview with Mr. Lasantha Mahendrarajah, Head of SME & Middle Markets at Cargills Bank, key points were discussed on how their business model strengthens the entrepreneurial community.

How does Cargills Bank attempt to differentiate as a new entrant in the business banking sector? 

As a new entrant to market, we want to move away from catering to larger corporates and competing with our peers.  We strive to focus on supporting community development and entrepreneurs from grass root level.

In looking at the SME sector as a whole in Sri  Lanka, despite the periodic incentives offered by governments towards uplifting the SME market, the sector is constrained by issues related to both product and factor markets compared to large-scale enterprises. Many entrepreneurs face difficulties in surviving and expanding their businesses despite having financial support due to poor knowledge and inability to adapt. However it’s their determination to succeed drives the SME industry today. Our mission is to support these ambitious individuals in their time of need to grow their business into bigger enterprises in future.

Hence, we have a team of individuals who are geared to offer business banking solutions to develop businesses, going beyond being just another bank that provides financial assistance.

How does your business model support entrepreneurs?

We have a “360-degree program for SME development”, which has enabled us to build a unique base of SMEs. Financial assistance is just a one part of many challenges faced by entrepreneurs. Unfortunately many banks attempt to deliver that and expect the business to grow successfully. If we look at certain clients of ours, financial assistance is not the only requirement they have searched for and it was about trying to understand how to build your business.

We at Cargills Bank try to understand each business from their own angle and look at supporting other requirements such as human resources development, market development, educate on regulatory requirements of their business and also financial planning apart from giving financial assistance. This is why we offer tailor made solutions to our customers and each account is special to us. This guidance will create a path for them to understand their right ground to do business and how they can promote their products to grow. This is our model and unlike others, we want to grow with the entrepreneurs.

Tell us how your business caters to many parts of the country despite having a limited branch network? 

Our Cargills Cash product has enabled us to connect with our customers through the 370+ Cargills Food City network to conduct basic banking transactions. A small business in a rural area can still use the nearby Cargills Food City outlet to carry out daily banking transactions despite we are physically not present in the area. Therefore, whether we have a branch or not our customers can operate with us from any part of the country. This was a key factor in diversifying our business throughout the island within the short span of existence in the business. 

How successful is your business model? 

Our SME book nearly tripled to about 6 billion last year, which is a substantial increase and this is a clear reflection of the confidence our clients have placed on us as a brand that support their business. We have moved away from being just another lending arm that focuses only on repayment. We ensure our money is effectively used and they benefit out of it to repay us. This requires commitment and willingness to compromise from standard product features to a tailor made solution to each person.

Once we visited a factory of a lady who runs a handloom business, to see that it is predominantly employed by women; widows, women who are heading their family and their lives mainly dependent on the growth of this business. We compromised a bit on our margins in supporting this entrepreneur to build her business, thus helping the livelihoods of many others connected to it. She referred us to many small-time entrepreneurs who are all our clients now. This is a stepping stone of building a loyal customer base.

‘Cargills’ is a brand that has been faithfully serving Sri Lankans for 175 years, built on a foundation of values and ethics. True to this heritage, Cargills Bank is taking banking to the masses by being inclusive and accessible. Cargills Bank is a fully-fledged licensed commercial bank with a BB (lka) Fitch Rating. Cargills Bank Business Banking Division offers working capital finance, term loan financing, project financing, accounts and corresponding banking making Cargills Bank at the forefront of SME Banking. The bank’s “in-store” banking concept provides extended hours and 365 day banking while “Cargills Cash” has enabled banking at over 370 Cargills Food City outlets reinforcing banking and shopping under one roof.

Cargills Bank’s Head Office is in Colpetty, with branches at Maitland Crescent, Maharagama, Old Moor Street, Wattala, Rajagiriya, Kandy, Peradeniya, NuwaraEliya, Ratnapura, Thanamalwila, Matara, Galle, Kurunegala, Chilaw, Kaduruwela, Vavuniya, Chunnakam and Jaffna.

Photo caption: Cargills Bank’s Head Office is in Colpetty and (inset) Lasantha Mahendrarajah, Head of SME & Middle Markets at Cargills Bank