Bimput, a microfinance company under the Daya Group (Private) Company, founded by UNP politician and businessman Daya Gamage, is facing severe financial difficulties. The company, which had its license revoked by the Central Bank of Sri Lanka in September 2023 for repeated violations of the Financial Business Act No. 42 of 2011, has continued to report significant losses.
Financial Troubles and Leadership Resignations
Recent filings with the stock exchange on December 31, 2024, reveal ongoing heavy losses, further weakening the company’s precarious financial position. The company’s chairman and CEO have also resigned, signaling instability in its leadership.
The Central Bank had previously banned Bimput from accepting deposits due to continuous financial losses, deteriorating capital levels, and poor asset quality. In May 2024, the Central Bank ordered a name change to Bimput Lanka Investment PLC, reflecting its shift away from its microfinance roots.
Mounting Losses
According to its auditor, C.T. Kulatunga Associates, Bimput reported an operating loss of Rs. 532.39 million for the 2021-2022 fiscal year, following a loss of Rs. 340.92 million in 2020-2021. The company’s annual report for 2020-2021 also revealed a loss of Rs. 350 million.
Interest income fell sharply in 2020-2021, dropping from Rs. 1.53 billion to Rs. 720.9 million, largely due to a decline in loans and advances. This significant drop in revenue has exacerbated the company’s financial woes.
Failed Capital Raising Efforts
The Daya Group, the major shareholder of Bimput, initially planned to issue debentures or pursue a rights issue to meet capital requirements. This strategy involved disposing of a property, but no prospective buyer was found, leaving the company with limited options.
In its 2020-2021 annual filings, then-chairman Sudath Jayasundara admitted the company had failed to attract a suitable investor but expressed hope for future investment. “We have not abandoned our efforts to find a suitable investor for Bimput Finance PLC and will continue to work towards that objective,” he stated.
Daya Group’s Diversified Interests
The financial troubles of Bimput add to the challenges faced by the Daya Group, which operates across sectors such as apparel, agriculture, import-export, and real estate. Founded in 1978 with Daya Construction Company, the group has since diversified its portfolio, but the losses at Bimput threaten to cast a shadow over its broader business operations.
Despite efforts to stabilize the company, the outlook for Bimput remains uncertain. The Central Bank’s intervention, leadership resignations, and continued financial losses highlight the critical challenges faced by the company. Whether the Daya Group can turn around Bimput’s fortunes or attract a much-needed investor remains to be seen.
