Innovative Financial
Service
Sustainable loan system to be a developed
country
Sri Lanka still is a developing country which needs more
products and services to be developed one. For that there
should be more and more entrepreneurs and the market must
span more and more. Innovations and investments on the
market are two key factors which use to develop this
wonderful concept of sustainable loan system.
P.M. Naveen Thiekshana Ananda.
M.C. Sandaruwan.
List of Content
01. Ordinary Loan Facilities at The Financial Institutes in Sri Lanka.
02. Intrest Free Loan Facility for a Sustainable Economy.
2.1 Innovators Based Loan System.
What is Invention and Innovation ?
Why Innovators are Important ?
Purpose of This Facility.
How This Facility Works ?
In the Project Fails ?
Summary of the Facility.
2.2 Franchisers Based Loan Facility.
What is Franchising ?
Why Franchising is Important ?
Purpose of This Facility.
How This Facility Works ?
In the Project Fails ?
Summary of the Facility.
03. Conclusion.
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01. Ordinary Loan Facilities at The Financial Institutes
in Sri Lanka.
Loans can define as a main source of income for financial institutes.
There are sevaral kinds of loan systems such as,
Personal loans Business loans
Vehical leasing Mortgage loans etc.
Although that makes good return to the institute, it often makes issues in households and
on the society as well.
Sometimes it force them to pay from their own lives as well.
Majority from current loan facilities at financial industry it force credotors to just hang on
the business or lifestyle ( competitive necessity ).
As a developing country, we must have a proper loan facility which different from an
ordinary loan facility which help creditors to stand on their own feat which is sustainable.
Sustainable
solutions for
Make it more nations's
worth by economy.
Facilitate the investing or
loan system developing by
through proper creditor.
evaluation.
Figure 01 : Process of implementing.
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02. Intrest Free Loan Facility for a Sustainable
Economy.
Existing facilities always ask for risk free traditional business.
But we need innovations for our nation’s enhancement and enhancement of our society.
For that their must have an attractive financial encouragement on entreprenures.
That’s why this concept is for.
It has two main categories,
01. Innovators based loan system : Encourage and support inventors to develop their
products and to be entrepreneurs.
02. Franchisers based : Enhance the standards of living in our society and makes
interaction of the global bussines.
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2.1 Innovators Based Loan System.
What is Invention and Innovation ?
Inventions can be defined as the process of creating something that has never been made
before.
Innovation is getting inventions into market.
Bringing innovation into your business can help you save time and money, and give
you the competitive advantage to grow and adapt your business in the marketplace.
Why Innovators are Important ?
The nation which prohibits the new experiments never wins the world, so as a nation we
have to look for more and more innovations.
In Sri Lanka, there are so many talented young people who produced lot of useful
products and systems its value hasn’t add into that to develop at the commercial level.
If it does,
It may enhance our nation’s value.
May can limit imports and save our money.
They might become entrepreneurs who can be an employer at society.
Purpose of This Facility.
To help the innovators to be entrepreneurs and to enhance both their and society’s
standards while increasing the company goodwill.
To increase the numbers of young entrepreneurs and enhance the economy of the nation.
To create more job opportunities within the country.
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How This Facility Works ?
In the modern companies which want to achieve competitive advantage, always use to
develop their research and development area to utilize existing technology and to found
new technologies.
For that there must be resource person like inventors who have the knowledge and skill to
create something new.
This facility is to motivate them and develop new products and processes under better
administrative.
Licensing is the base concept of this facility.
Licensing of technology is about purchase the right to utilize technologies owned by
someone else.
It relates to specific process/ product invented by the licensor (inventor).
Licensee is the party who buy its rights to use by paying the licensor.
Payments may include, lump sum, royalty, share of profits, good brought back & others.
It may once & for all or continuous transfer of knowledge and it more control and
leverage by the licensor, but not involved in operations.
Identify the Evaluation Acceptance or
invention ( Feasibility reject and
Analysis ) monotoring
• Relevant • Accept.
industry. • Capability and knowledge • Agreement.
• Similar products of inventor. • Cordinate.
or services. • Target market. • Recieve Pay
• Purpose. • Effectiveness at the back.
society. • Coordinate the
• Rate of return. project.
Figure 02 : Overall process.
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Step 01 : Identify the invention.
First we have to identify the relevant industry of the invention.
Also we have to identify whether there are any similar kind of product or processes
before.
Step 02 : Evaluation ( Feasibility Analysis ).
Proper evaluate on the capability and knowledge of inventor to identify whether this
invention is poor or successful and whether it is harmful for the society.
Analysis the expected return income of the certain invention.
Step 03 : Acceptance and monitoring.
If those conditions are fare then comes at the agreement according the terms and
conditions for its validity.
Agreement: Initial investment gives from our side.
No interest on that.
Have to give the right of certain technology for us (license).
Have to give 25% from the profit as dividend for us annually.
( It has to pay monthly. )
Initial investment has to recover without interest if the project failed.
If the creditor wants to close the agreement he has to pay as follow.
invested amount + ( 5% * Number of years * invested amount )
After having the agreement, it has to be properly coordinated till the contract end.
While that it has to receive the dividend monthly as well.
In the Project Fails ?
In the failure the total amount of initial investment have to be get back without intrest in
fare agreed time period in rentals or once.
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Summary of the Facility.
Objectives.
Support inventors to span their developments at the
market.
Create more number of young
entreprenures.
Make earning while supporting the national
economy.
Enhance living standards in
society.
Support to create a sustainable national economy and developed country.
Figure 03 : Objectives of the facility.
Keep continue the
project as agreed as
the licensee.
Success of the project
Pay the invested
amount + ( 5% *
Number of years *
Implement of the invested amount ) and
project close the agreement.
Creditor has to
payback the total
Fail of the project
amount of investment
without any intrest.
Figure 04 : Implementing process.
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2.2 Franchisers Based Loan Facility.
What is Franchising ?
Franchising is a special form of licensing/ technical services agreement which has
following characteristics.
Have to use trade name.
Payment as in licensing.
Example ;
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Why Franchising is Important ?
Sri Lanka still is a developing country which investments can act a critical path to the
development.
Franchising can attract more investers both top branded local companies and foreign
companies.
Here investor doesn’t need to get much attemt in promoting because the mother company
already have gone through the society.
Purpose of This Facility.
The main purpose of this facility is to enhance the living standards of the current society
while promoting about the financial services in our institute.
Also will help to span local investment space at the global level.
How This Facility Works ?
This facility has no interest only thing is creditor has to give 10% from the monthly profit
till recovers the total investment back.
This has more benefits as in follow,
Doesn’t need to do any market research because company does it their self.
It gains a monthly income.
Can have more agreements on different criterias.
( Marketing about our institute )
Risk free.
Basic process happen as in follow.
Apply from the mother
Take the part from
company and having market Invest the amount and
profit till the pay back
researchs and evaluations implement the project.
of total amount.
through feasibility analysis.
Figure 05 : Process of the facility.
We only have to consider about the loyalty of the creditor because the franchising
company does the most of parts in evaluating process.
Then it earns a part from profit till full amount recovery.
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But its implementation must consider about following factors for its gain.
Creditor’s loyalty is must.
Transperent forecast.
10% from monthly profit payment till the end.
If the creditor wants to cancel the agreement before full payment he must pay,
invested amount + ( 10% * invested amount ).
In the Project Fails ?
Total amount of initial investment have to pay back without intrest in agreed time period
in rentals or once.
There will be no any discounts or what so ever, the creditor has to pay the full amount.
Summary of the Facility.
Objectives.
Make earning while supporting the national economy.
Enhance living standards in society.
Support to attract investors to invest in local projects.
Force the local entreprenures to follow strategies of developed countries.
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Keep continue the
project as while
paying the part of
profit.
Success of the project
Pay the invested
amount + (10% *
invested amount ) and
Implement of the close the agreement.
project
Creditor has to
payback the total
Fail of the project
amount of investment
without any intrest.
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03. Conclusion.
Majority from existing loan facilities in Sri Lanka doesn’t give sustainable solutions,
them are profit oriented.
Our facilities focus sustainable development.
The inventors based facility has following benefits at each party.
Society – Enhance living standards.
Increase efficiency and effectiveness.
Make economically, socially strong households.
Nation - Develop nation’s economy.
Create job opportunities.
Increase young entrepreneurship.
Creditor - Can develop invention into invention.
( Inventor ) Work under better administrative.
Less stress.
Bank - Long term income.
Having a license.
Goodwill.
Second facility targets at enhancement of social standards while opening local investment
opportunities to the external parties.
It has benefits as in follow
Nation - Can have the interact of investors.
Develop the nation’s economy through more investments.
Society - Enhance social standards.
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Creditor - Less risk.
Can use as an extra source of income.
Bank - Less risk.
Doesn’t need to conduct market researches.
Long term income.
From all of those facts, we can see these two facilities certainly have more than ordinary
loan facilities.
Specially it has the sustainability with itself.
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