ORIX Leasing Pakistan Limited (OLP) is, a part of ORIX Corporation Japan, which is one of the largest diversified financial services Groups in the world. It , started its journey in Pakistan as Orient Leasing (Pvt) Limited in 1986 with total strength of 14 staff members and paid up capital of Rs. 10 million. It is one of the pioneers of leasing in Pakistan. 25 years down the road, OLP stands as a public limited company quoted on Karachi, Lahore and Islamabad Stock Exchanges with staff strength of over 450, equity base of Rs. 2.2 billion, more than 30 offices country wide and 5 associate companies in Middle East, North Africa and Central Asia Region. This is a unique position ever attained by a Non-Banking Finance Company in Pakistan.
Committed to its shareholders, OLP has paid dividends up to 45% for 19 years. The position attained by OLP over the years can be gauged from the fact that today in terms of asset base, the company constitutes 64% of the total leasing sector and 33% of total non banking financial sector.
OLP’s forte lies in serving the Small & Medium Enterprises (SMEs). SMEs form the core of Pakistan’s business enterprises. According to studies, over 90% business entities in Pakistan are classified as SMEs with a contribution of 30% in GDP. Traditionally SMEs have largely remained outside the domain of formal financing due to elaborate regulatory requirements and guidelines of banks. Leasing, being asset-based financing, provides an ideal financing mode to SMEs. Major business strength of OLP lies in our expertise with the SME sector. Till date we have provided credit of over Rs. 100 billion primarily to the SMEs.
While finance lease remains the core business of OLP with Corporate, Consumer and Commercial Vehicles as our key business divisions, our success was made possible largely by product innovation and diversification. Our cost effective and value added products serve as the key drivers of our success. We entered into operating lease by offering generators on short-term rentals complete with maintenance when the concept was very new in the market. Likewise we tapped the technology domain by establishing our eBusiness division offering innovative solutions to corporates, launching loyalty cards and spreading a network of Point of Sale terminals across the country. Keeping in view the need for poverty alleviation, we launched our micro finance services offering credit for sustainable livelihood. More recently, we established Islamic Finance Division where we are offering Shariah-compliant solutions.
Alongside, OLP consciously ensured having a mix of funding sources with the objective of reduced dependence on any one source. I am happy to state that our funding today comes from our bank lines, multilateral donor agencies, debt market instruments including TFC and commercial paper as well Certificates of Deposit that we offer to corporates and individuals alike.
Besides expanding our portfolio of products, we also focused on geographical expansion. Today we have a country wide presence through more than 30 offices in different cities where we are offering our various products and services. Likewise we went international as far back as 1993 when we started our first overseas operations in Oman. To date, we have launched overseas ventures in Oman, Saudi Arabia, Egypt, UAE and Kazakhstan. We have deputed 34 staff members including Managing Directors to manage the operations of OLP associated companies.
As we expanded business and outreach, we strengthened our risk management accordingly. As part of our risk management principles, we do not have an exposure beyond 15% in any single business sector. Our top 25% customers contribute to just 10% of the revenues. Our recovery team is productive and proactive and our portfolio is well diversified and distributed. OLP enjoys the highest credit rating in the leasing industry and has been assigned long term rating of AA (Double A) and short term rating of A1 Plus (A One Plus) by PACRA. These ratings denote the lowest expectation of credit risk emanating from a strong capacity for timely payment of financial commitment.
Leasing business has enormous potential in the Country and I find business opportunities in the leasing business, particularly the SME sector very encouraging. The period of restricted growth appears to be coming to an end as the funding position has improved. I am confident that OLP will continue its progress and achieve greater heights in future.