Alliance Finance Company PLC (AFC) has been able to preserve its investment grade credit rating of BBB- from ICRA Lanka Ltd (ICRA) despite the extremely challenging macroeconomic conditions.
AFC is the third oldest finance company in Sri Lanka with a heritage built with the trust of four generations of loyal customers spanning more than six decades.
ICRA reaffirmed the credit rating of BBB- of AFC in its latest rating review published on 31 October 2018. However, the rating outlook was revised to negative given the increase in non-performing loans due to adverse economic conditions and erratic weather patterns in the recent past, which has resulted in the banking and finance sector experiencing a steep increase in non-performing loans in 2018 when compared to 2017.
AFC has one of the most diversified funding sources amongst finance companies in the country with equity, deposits, bank borrowings and foreign funding from global development financial institutions with a significantly lower dependence on public deposits.
The foreign lenders of AFC include the private sector lending arm of the World Bank Group, International Finance Corporation (IFC), Netherlands-based Tridos Bank, Switzerland-based Symbiotics SA and US-based Developing World Markets (DWM) while a few more funding lines are in the pipeline from several European countries.
AFC has been very successful in developing such funding partnerships with leading development finance institutions given its strong focus and genuine commitment to its Triple Bottom Line business philosophy which supports and facilitates socially and environmentally sustainable development in Sri Lanka.