Harare – Micro-finance firm, Untu Capital said it has taken a very cautious approach to its lending activities in the first six months ended 30 June 2019 which is reflective of the highly volatile operating environment characterised with foreign currency shortages, currency uncertainty and high inflationary pressures.
Resultantly, the Company’s loans and advances during the period under review closed at ZWL$6.7 million compared to ZWL$7.1 million in the same period last year, representing a decrease of 5%.
The country’s economic outlook for 2019 is very dim and confirmed by various institutions to be heading towards hyperinflation and this could further prompt various lending institutions to keep their lending activities tight throughout the year.
However, in statement accompanying the financials, Untu’s Chief Executive Officer Clive Msipha said the Company will focus on increasing its lending activities in the second half of the year.
“We are seeing good opportunities to lend to our clients and are mindful of the risks that this current environment poses,” Mr Msipha said.
“We do believe that we can continue to trade profitably and lend to MSMEs.”
During the period under review, the Company recorded interest income of ZWL$2.4 million which was ZWL$831.4 ahead of prior year largely due to the effects on the Company charging high interest rates compared to prior period.
Profit for the period increased by a robust 2894% to ZWL$6.7 million compared to ZWL$223.7 in the prior comparative period.
“It is also noted that other income of ZWL$9 330 998 constitutes the effects of fair value adjustments of the properties sitting on the Company’s balance sheet together with the foreign exchange gains/losses in the period under review,” Company Chairperson Bartholomew Msakwa said in a statement.
On the outlook, Mr Mswaka said the company remains focused on weathering the current turbulence and continuing to service its core clients.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, firstname.lastname@example.org and email@example.com.