eBusiness Weekly
Business Reporter
Getbucks Microfinance Bank Limited (Getbucks) says it is finalising a capital raise exercise which when complete will see the Microfinance Bank compliant with the minimum capital requirements.
The microfinance bank has been negotiating for a US$5 million recapitalisation to enable the bank to meet the required minimum threshold set by the Reserve Bank of Zimbabwe (RBZ).
According to the central bank thresholds, Tier 3 deposit-taking microfinance banks are required to have US$5 million minimum capital while Tier 1 banks, large indigenous commercial banks, and all foreign banks are required to have US$30 million minimum capital.
Tier 2 commercial banks, merchant banks, building societies, development banks, finance and discount houses are required to have a US$20 million minimum capital.
As part of the capital raise initiatives, the bank is also considering migration of the Company’s listed securities from the Zimbabwe Stock Exchange (ZSE) to Victoria Falls Stock Exchange (VFEX).
Dr Rungano Mbire, the Bank’s chairman in a statement of financials for the half year to June 30, 2022 said the microfinance bank’s core capital closed the period at $332 million.
“This translates to US$1 million at the foreign currency auction rate, which is below the current minimum regulatory requirement of ZWL equivalent to US$5 million,” he said.
He said that the Micronance Bank is in the process of finalising a capital raise exercise which will see the bank compliant with the minimum capital requirements.
The GetBucks Microfinance Bank is a Zimbabwe-based financial service company with operating segments that include Consumer Lending which provides individual public sector consumer loans. Small and Medium Enterprise (SME) Lending segment provides loans and other credit facilities for corporate clients.
Dr Mbire said that the Bank expects the operating environment to remain tight in the short to medium term.
However, the Micronance Bank has attained new lines of credit and has since started issuing USD loans which will improve profitability.
“Investment in technology will continue to be the core focus of the Micronance Bank’s strategy to deliver financial service as the Microfinance Bank seeks to grow its transactional revenue,” he said.
In terms of financial performance for the period under review, the Bank had an inflation-adjusted loss after tax of $44 million, from a $62 million loss registered in June 2021.
Dr Mbire said that the loss was on the back of depressed lending due to the low disposable incomes affecting the civil servants’ loan affordability and the fact that the depreciation of the ZW meant that the loan size had significantly reduced in real terms.
“The Micro finance Bank’s non-lending revenue grew in line with the strategic vision of diversifying the top line,” he said.
During the period under review, inflation-adjusted total Assets grew by 13 percent to close off‑ at $2,5 billion in June 2022 from $2,2 billion as at December 2021 on the back of a diversified asset portfolio denominated in foreign currency.
“This was in line with the value preservation strategy adopted by the Microfinance Bank to combat the value eroding effects of inflation,” said Dr Mbire.
The Bank’s inflation-adjusted deposits declined by 7 percent from the December 2021 position of $173 million to close at $160 million as at 30 June 2022.
Dr Mbire said that this is reflective of the liquidity challenges experienced in the market and also the reluctance of clients holding on to balances towards the RBZ auction due to settlement delays.
