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FIRSTCRED REPORTS STRONG PROFITS

patriot by patriot
August 10, 2021
in Business
242 10
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FIRSTCRED REPORTS STRONG PROFITS

FirstCred CEO, Ms Dudu Garekwe

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·         After tax profit for the year increased to P53.7 million

·         Group revenue was stable at BWP 92 million despite reduced demand for loans during Covid-19

·         Loan book increased 73% to BW521 million in December 2020 from P271 million in the prior year

·         Acquisition and consolidation of a 52% interest in Finclusion Africa Holdings Limited expands operations from Botswana to South Africa, Namibia and Eswatini

Botswana-based micro-finance institution FirstCred Limited reported a major jump in profits for the financial year ended 31 December 2020. The results were mainly bolstered by the acquisition and consolidation of a 52% interest in  Finclusion Africa (Finclusion), expanding the Group’s footprint across four African countries and paving the way for strong growth plans which include the introduction of SMME and other loan products as well as the evolution to deposit taking banking institutions across all operations over time. 

FirstCred recorded an after tax profit for the year of P53.7 million, after recovering an impaired related party receivable through the acquisition of Finclusion in December 2020.

FirstCred CEO, Ms Dudu Garekwe, commented: “We are very pleased with this solid performance, despite a very challenging operating environment. The acquisition of Finclusion expands our operations from Botswana into South Africa, Kenya, Namibia and Eswatini, providing us with regional diversification and significant growth prospects.

“We expect to evolve the business into deposit taking banking institutions across all operations and have also applied to various regulators for approval of our SMME product in countries where it’s not yet available.

Group revenue of P92 million achieved in December 2020 remained relatively stable compared to 2019, despite reduced demand in loans because of the current economic challenges.

The acquisition of Finclusion, which was consolidated in the Group ‘s results for the first time on
31 December 2020, increased the Group ‘s asset base to BWP 521 million as at the end of the reporting period, compared to BWP271 million in December 2019 and BWP160 million achieved in December 2019.

Impairments however increased to 14% in December 2020 from 11% in December 2019 with the Group saying it has reviewed all loan products with sub-par collection rates of below 98% to manage loan book quality.

Financial borrowings stood at P311 million, indicating the Group ‘s ability to continually leverage from debt to fund loan book growth.

“Since we took over as new management, we have focused on implementing the right corporate governance processes and procedures, and the rebrand to FirstCred has helped us to install the right corporate culture underpinned by ownership. We continue to grow our operational footprint, alongside the introduction of various innovative online platforms and products, to further increase our capability to provide accessible financial services,” said Garekwe.

Post the reporting period, on 14 May 2021, FirstCred received approval of its BWP 1 billion guaranteed medium term note programme from the Botswana Stock Exchange Listings and Trading Executive Committee in May 2021. Proceeds of the notes programme will be used for regional expansion, to re-finance and/or retire the existing external debt in order to lower cost of capital and to aggressively grow the loan book.

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  • Skelemani mishandled Kgosi Mosadi Pan African Parliament furoreMarch 22, 2023
    Adam Phetlhe The ravaging inferno sparked by the purported resignation of Kgosi Mosadi Seboko from the Pan-African Parliament (PAP) is fuelled by the Speaker of the National Assembly, Phandu Skelemani mishandling the matter. Had he performed due diligence on […]
  • Ithuba to roll-out LottoMarch 22, 2023
    STAFF WRITERS editors@thepatriot.co.bw Ithuba Solutions Botswana is waiting with bated breath for an announcement on the issuance of a lottery license, by the Gambling Authority, following the successful conclusion of negotiations in December 2022, The Patriot on Sunday has […]
  • BDP rejects Living WageMarch 22, 2023
    BAKANG TIRO editors@thepatriot.co.bw Ruling Botswana Democratic Party (BDP) MPs on Friday defeated the motion proposed by MP for Nkange constituency Dr Never Tshabang, proposing for government to introduce a living wage, which will be adjusted according to the cost […]
  • Uganda passes a law making it a crime to identify as LGBTQMarch 22, 2023
    Report by Elias Biryabarema Reuters Uganda’s parliament passed a law on Tuesday making it a crime to identify as LGBTQ, handing authorities broad powers to target gay Ugandans who already face legal discrimination and mob violence. More than 30 […]
  • Ian Khama to receive African Icon Award  March 22, 2023
    KT Press Former Nigerian President, Dr. Goodluck Ebele Jonathan will headline other African greats who are set to be honoured at the maiden edition of The African Heritage Concert and Awards slated to hold in Kigali, Rwanda on April […]
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