Deposit taking microfinance, Getbucks Microfinance Bank has posted a net profit of ZW$ 192 million in inflation adjusted terms for the year ended December 2021 representing a 366 percent increase from prior year loss of ZWL 72 million.
In its FY21 financial results, the bank said the positive performance was largely as a result of a reduction in the net monetary loss from ZW$48 million in 2020 to close at net monetary profit of ZW$ 25 million in 2021.
“This was largely due to the Microfinance Bank’s assets being predominantly monetary,” the bank said.
Operating expenses increased by 55 percent during the year under review from ZW$ 258million to ZW$ 399million, although the increase was lower than the average inflation for the year under review of 60.74 percent.
However, customer deposits shrunk by 58 percent to close at ZW$ 79.2 million from ZW$ 187 million due to the general market’s reluctance to hold on to monetary assets considering the inflationary pressure and fear of real monetary loss due to currency depreciation.
The loan book grew from ZW$132million in 2020 to close at ZW$179 million in 2021 as the economic environment improved after a tough 2020 that was characterized by COVID-19-induced lockdowns.
The Microfinance Bank grew its total assets by 44 percent, from ZW$70 million to ZW$ 1 billion, as a result of a diversified asset portfolio made up of property carried at fair value and monetary assets in the form of loans.
“This portfolio mix is in line with the value preservation strategy of the Microfinance Bank which saw the property assets counter the eroding effect of inflation on monetary asset,” said Getbucks.
The bank’s net equity position was ZW$ 474 million translating to USD4.4 million at the official exchange rate as at 31 December 2021, which is below the minimum statutory requirement of USD 5 million.
“The Microfinance Bank is carrying out a rights issue as part of its capital raise initiative. The capital raised will help the Microfinance Bank address the regulatory minimum capital requirement of USD 5million equivalent. The raised capital will reduce the Microfinance Bank’s cost of funding, as well as capacitating the Microfinance Bank’s expansion drive,” said Getbucks.
