Sri Lanka banks are investing heavily in digitalization. However, there are many challenges they have to face in order to create a dynamic fintech ecosystem. The banks and financial institutions still seek modest growth of Sri Lanka fintech.
Sri Lanka’s digital finance is way behind the curve. Banks are struggling to expose Sri Lankans to the digital era. Yet, consumers are still reluctant to use digital services provided by banks. They still prefer conventional banking.
Sri Lankans are very attached to their banks. With only 19% of their population living urban, the domestic inclusion rate reaches 80%. The number is above the region’s average. That is possible because of banks’ efforts to bring banking services to the poorer.
Nation Trust Bank is one of the pioneers of digital banking services. In 2017, they launched FriMi. After that, Commercial Bank of Ceylon launched Flash, then NDB introduced NDB Neos.
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Fintech in Sri Lanka
While banks are struggling to digitalize their services, several non-bank institutions have established fintech services. In 2012 Sri Lanka’s largest telecommunication firm, Dialog Axiata starts the growth. It launched eZ Cash, a mobile money service. It has been successful to mark fintech growth in Sri Lanka. In 2017 alone, it has processed LKR 25.5 billion (US$ 144 million) worth of transactions. It also had three million users.
Mobile money and payment services are the country’s most successful fintech besides eZ Cash. At the end of 2017, 12 central bank licensed mobile money operators. Besides, two cellphone providers launched e-money service.
Some of Sri Lanka’s most notable fintech are DirectPay (electronic payment), Park and Pay (parking payment), and JustPay (mobile payment).
Another emerging segment in Sri Lanka is peer-to-peer lending. Helios is the country’s first peer-to-peer platform. It launched in early 2018. It connects the investor with the borrower through an online marketplace. As of July 2019, the platform had channeled LKR 4 million (US$ 22K) in loans. It also has secured its second round of funding earlier this month.
The last emerging fintech in Sri Lanka is Crowdisland. It launched in 2016. The platform matches local entrepreneurs with investors around the world.
