PFCL: Spreading Wings

“The products we offer and our size have made us different from others. Our interest rates are almost equal to that of the commercial banks.”

ASHOK SHERCHAN CEO

Prabhu Finance Company Limited

The proverb ‘A rolling stone gathers no moss’ matches the credentials of Prabhu Finance Company Limited (PFCL). Within six years of operation, the company has succeeded in holding five per cent market share among 90 finance companies operating in the market. Ashok Sherchan, CEO at PFCL, says, “Our services are the same if compared to other banks and finance companies. The products we offer and our size, however, have made us different from them. Our rate of interest is almost equal to that of the commercial banks for deposits as well as lending.”

Established in February 2006, the company – a part of Prabhu Group of Companies – has been categorized as ‘C’ class financial institution by Nepal Rastra Bank. PFCL constitutes around 10 per cent share in total remittance excluding the contribution made by its money transfer agency Prabhu Money Transfer. Seventy per cent share of the company is owned by the promoters while 30 per cent shares are held by public shareholders. The company has approximately Rs 7.5 billion in deposit while having a lending portfolioer of around Rs four billion. According to Sherchan, with a strong presence in lending, the company can now invest millions of rupees even on individuals.

 


PFCL targets to work for various groups of people, from business people to individuals at the grass root level. It has special plans to bring underprivileged people into the banking sector that are unable to or hesitate to seek service from commercial banks. The bank is also directly linked to the customers via its remittance business. Sherchan says, “We try to provide loan to everyone and deal with every case equally and positively to make our customers feel at home.”

Success Mantras

 
Besides a Paid-Up capital of Rs 469.2 million, the company has also seen growth in terms of deposit, branch network and loans. The company owes its success to the policy of expanding its branches aggressively in 2007, points out Sherchan. The company now has 37 branches and 150,000 direct account holders all over the country. It targets to expand its number of branches to 41 by the end of current fiscal year, informed Sherchan.

Sherchan says, “Although we are a finance company, our ability to expand on number of branches has made us successful.” The company has a mission of encouraging banking habit among the remittance receiving population. When asked about other reasons behind the company’s success, Sherchan points out three things: dedication, dreams and positive attitude.

 The dedicated staff have also contributed towards uplifting the status of the company. Sherchan shares, “We have more than 300 employees in Nepal and foreign countries who give their best.” PFCL trains its employees every month and carries out trainings in different countries to enhance their skills. He says, “There is so much to learn in trainings. Because of our portfolio and working system, employees can learn more about the entire banking process like in commercial banks.”

 The bank is developing the ‘customer first’ culture as one of its business strategies. It is strengthening internal management mechanisms and also making them more customer-oriented. The company is also focused on the customers from remittance business and regularly visits the targeted customers to lure them with different products.

Products

The bank is prepared to work for different groups of people and it reflects in the various products the company has in its portfolio. There are altogether eight deposit accounts including Mamata Bachat Khata for Children, Bharosha Bhachat Khata for aged people and Sangini Bachat Khata for women, available with attractive interest rates. The bank also provides home loan, education loan and foreign employment loans among a host of many other loans. The company also facilitates loans such as margin loan, consortium loan, personal loan, bank guarantees, bills purchase and working capital loan.

Unlike other finance companies, PFCL provides Loans against Share, Gold or fixed deposit. It also provides banking facilities round-the-year with internet and debit card facilities. Besides, there are loans for those opting to start a small business or industry. Sherchan says, “As long as they meet our criteria, we provide loans to each and every individual that approach us. We open account for remittance receivers for a token amount of Rs 51.” PFCL also provides services such as e-banking, SMS banking, SCT debit cards, ABBS facilities and fund transfer for clearing and collection services.

Investment

The expansion of the company in terms of its branches has increased the company’s access to all kinds of sectors in remote as well as urban areas. PFCL has invested in small to big budget projects all around the country. Sherchan says, “We have invested in most sectors in Nepal which includes big budget hydropower projects.”

PFCL has immediate plans to invest in agro business. It has already invested Rs 10 million in Kalaiya this year for small farmers involved in sugarcane cultivation. For another project, the company has distributed cows in five districts to the farmers in collaboration with Dairy Development Corporation. The two projects cost Rs 50 million in total and the investments have brought about positive results and have inspired the company to invest more in the agro sector, says Sherchan.

CSR Activities

PFCL has supported literary programs as part of its corporate social responsibility (CSR) activities. The company is also providing scholarship to four underprivileged students from Burtibang in Baglung district to study intermediate level. In Kathmandu too, two students are studying management on a scholarship provided by the company. PFCL also helps one handicapped student from Myagdi.

 The company is in the process of becoming a development bank and this promises to benefit the company as finance companies have many limitations when compared to the development banks. Sherchan shares, “There would be no limitation for us once we become a development bank as we can then work aggressively.”

The current political situation of the country does not augur well for the economy at large, feels Sherchan.

 He shares, “There is no demand for fresh loans and we do not have new industries or entrepreneurs coming up. Industrialists are either running away or surviving on the existing industries.” PFCL is trying to increase its contribution in the remittance business and finding various other sectors for investment to deal with the situation.