CRDB Bank’s Microfinance Service Company has posted a pretax profit increase 41 per cent to 8.58bn/-, thanks to overall growth of business activities.
The bank’s unit, which will soon turn to
full-fledged microfinance bank, posted 8.58bn/- against 6.13bn/- of
2014. The unit profitability was mainly due to a growth in insurance
commission, interest income on term loans and non-interest income
generated last year.
The loan portfolio, according to a
statement issued during the bank’s investors forum, increased by 39 per
cent to 221bn/- in 2015 from 158bn/- in 2014. The loan went up as the
deposits mobilised from partner microfinance institutions (MFIs)
increased by 81 per cent to 123bn/- from 68bn/- in 2014.
“This (deposits) is attributed to the
increase in the number of partners’ institutions, their members and the
mini-service centers’ operations,” the report showed.
A decline in the number of MFIs from 469
in 2014 to 441 could not derail the saving mobilisation. The bank said
the drop was due to non-compliance. Total assets of the microfinance
unit grew to 24.19bn/- from 17.53bn/-.
The profit was also pushed up by fees
and commissions income that increased 39 per cent to 21.94bn/- in 2015
from 15.85bn/- in 2014. The operating cost went up by 43 per cent to
13.93bn/- last year compared with 9.8bn/- of previous year, caused by
growth in the number of staff and implementation of a new business
expansion initiative through mini-service centres.
The bank was in final preparation of
turning the unit into a microfinance bank, where if everything goes as
planned it will start operation this July. The bank said the subsidiary
would be turned into a full fledged microfinance bank after showing
signs of becoming stand alone bank.
The microfinance subsidiary has 75
service outlets across the country, which is enough to act as branches
to support the establishment of the bank.
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