Key Highlights:
- Recorded ZW$5.8 million loss
- Operating expenditures grew to ZW$98.8 million
- Net interest income increased by 90% to ZW$40.6 million
HARARE – State-owned micro-finance banking unit, Empower Bank saw a slow start to the year, citing low liquidity during the first quarter of 2021.
The recently released half-year financial statements ending 30 June 2021 shows that the lender which was created by the government in 2018 to specifically support various youth initiatives, continued on a loss trajectory after recording a loss of ZW$5.8 million in real terms narrowing from ZW$235.5 million loss recorded in the same period last year.
This is despite the business picking up in the second quarter following a ZW$250 million capital injection by the government.
Acting chief executive officer Shadreck Mhembere attributed the subdued performance to rising operating expenditures amounting to ZW$98.8 million, which was 66% ahead of operating expenses of ZW$59.5 million recorded in the first half of 2020.
However, the bank saw sustained growth in the loan book spurred by the capital injection from the shareholder, hence growth in revenue.
Net Interest income for the period increased by 90% to ZW$40.6 million in inflation-adjusted terms from ZW$21.4 million recorded in the same comparable period last year.
The loan book went up by 63% in nominal terms from ZW$65 million in December 2020 to ZW$106 million in June 2021. In real terms, the loan book grew by 38%. The bank has a target of disbursing loans worth about ZW$260 million to youths country wide by year-end.
“The Microfinance Bank registered some growth in its deposits in both nominal and real terms,” said Mhembere.
“As at 30 June 2021, the bank’s deposits stood at ZW$14.5 million compared to ZW$8.1 million as at December 2020.”
He added that inflation exerted some pressure on the operating expenses although management worked hard to keep a lid on the expenses some of which were unavoidable in running the business.
The bank closed the period under review with a total capital of ZW$350 million after the shareholder injected an additional ZW$250 million in the second quarter of the year.
Meanwhile, during the period under review, the Microfinance bank did not make any further investment in brick-and-mortar branches to maintain a total of four (4) branches and one (1) sub-branch as it moved towards increased utilization of digital platforms and growing the agency banking network.
The Bank recruited eight (8) new agents bringing the total to 11 while it also intensified the mobile banking uptake drive.
“The number of customers on Mobibank increased by 120% from December 2020 to 30 June 2021,” said Mhembere.
“To further buttress this, the bank has now added the Netone USSD to the existing Econet USSD platforms which is expected to further increase the MobiBank uptake going forward.”
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