LasFin to add three more remittance partners
Lasco Financial Services Limited has received central bank approval to add another three remittance service providers to its network amid plans to expand its remittance business this year beyond the current 140 agent windows, especially in rural towns.
The new additions, whose identities were not disclosed, will grow LasFin’s list of remittance partners to seven. Its agent network includes large groups such as Mobile Electronics, Prime Trust Financial, Paymaster, Credit Unions, and several independent business owners.
LasFin has in recent times sharpened its focus on its remittance business, its largest income earner, which accounts for 42 per cent of the $2.3 billion in total revenues earned for year ending March 2021.
The business segment grew more that 30 per cent in 2020, helped by the pandemic, as due to border closures and travel restrictions, money that normally would be passed hand-to-hand by visiting relatives entered the remittance system instead.
The gains were felt right across the market, pushing Jamaica’s remittance inflows to almost US$3 billion. The momentum continued into 2021, with remittances for the year hitting a new record at US$3.5 billion.
But the market upswing also came with challenges for the financial services provider: the increased use of online money transfer services also meant cheaper transaction fees. Last year, LasFin added Boss Revolution as its fourth remittance partner to grow volumes and ultimately make up for any loss of revenue.
“We started payment to Boss Revolution after several months of system development. We have been approved by the Bank of Jamaica for three others and are doing those developments next to roll out later in the year,” LasFin Managing Director Jacinth Hall-Tracey told the Financial Gleaner.
Hall-Tracey did not name the new service providers.
LasFin is the second largest player in Jamaica’s remittance market and serves as an agent for MoneyGram, Ria Money Transfer, and Remitly. Its chief rival is GraceKennedy Remittance Services, which is the exclusive agent for Western Union.
LasFin’s business lines include microlending, cambio services or foreign exchange dealing, and remittances. The microfinance operations, which accounts for 26 per cent of revenues, is on the rebound from the COVID-19 squeeze on jobs and salaries workers and small businesses, groups that microlenders typically serve.
Hall-Tracey is optimistic that the business will return to growth, aided by the $100 million in funding secured by subsidiary Lasco Microfinance from the Development Bank of Jamaica to onlend to SMEs on the path to recovery from the pandemic.
Those borrowings in the December quarter add to a $1.2 billion facility that LasFin secured during the summer from JMMB Bank, money it has used for working capital and to refinance a $1.78 billion unsecured bond that was issued in February 2018.
The loan proceeds boosted the company’s cash holdings by 75 per cent to $998 million as of December 2021. Hall-Tracey says the company expects to complete some initiatives that are key drivers to its growth in its 2022-23 financial year.
“We operate in a very competitive and fast-paced environment, the dynamics of which can be very impactful on our revenues. Our intention is to position the company to lead on initiatives that drive growth or to seize growth opportunities once they arise,” she said.
Within the December 2021 quarter, LasFin’s earnings grew five per cent to $130 million, driven by a 30 per cent increase in revenue.