FirstCred seeks to widen lending to SMEs

FirstCred seeks to widen lending to SMEs

FirstCred announced that it has applied to the regulatory authorities, to expand lending to Small and Medium Enterprises (SMEs) which will allow the Company to increase its offering and continue to drive financial inclusion for small business.

The micro lender says its strategic objective of is to retain and grow its market share throughout sub-Saharan Africa through a sustainable business model that offers competitive interest rates, an evolving and innovative product suite.

In view of its new strategic shift, the group says its operations will diversify into the region following the acquisition of 52 percent of Finclusion Group at the end of December 2020. With this acquisition, the Group now operates in Eswatini, Kenya and Namibia and South Africa, upbeat on prospects for the enlarged group.

“The current economic environment which has been significantly affected by Covid 19 has also presented opportunities in transformation through technology, the group continues to exploit the available resources to deliver a customer centric and quick credit decisions and loan disbursements,” the company wrote in its results statements for the 6 months ending June 2020.

Total assets went up by 56 percent from P 240mn in June 2019 to P 376mn in June 2020 which the lender says strengthens the Group‘s ability to make more returns from the deployed assets. “An increase of 29 percent in other financial borrowings is in line with the Group ‘s aim to continually leverage from debt to fund growth of the loanbook,” management says. 

Group revenue of P 92mn in June 2020 remained relatively stable with a marginal growth of 0.2 percent.  Management says the group‘s loan collection rate remains high at an average first strike of 98 percent, which has enabled the Group to achieve the impairment to loan book ratio of 10 percent in June 2020 a reduction of 1 percent from 11 percent in June 2019.

FirstCred profit after tax increased by 2513 percent from P 0.5M in June 2019 to P 13.6mn in the 6 months ending June 2020.  The micro lender says the increase in profitability was due to lower impairments on loans and impairments.

The group rebranded from GetBucks Limited to FirstCred Limited during the last quarter of 2020. This process was concluded following consultations with stakeholders where the group redefined its mission and values.