eBusiness Weekly
Michael Tome
INNBUCKS Microbank Limited has hinted at introducing a pack of innovations including nano loans and electricity sales in the second half of the 2024 financial year as the entity continues to grow its footprint in the local financial space.
Products to be rolled out in the course of 2024 include payroll processing, structured finance and international banking while bolstering the existent wallet services.
According to Innbucks, this deliberate spending is meant to position the microfinance entity strongly in the market in its pursuit of growing transactional revenue.
The microbank which started operations in 2022 has gained significant market acceptance owing to its convenience and ubiquity, enabling it to have a wider reach across the country.
Its geographically dispersed credit agent model has allowed the entity to have a wider reach allowing it to fulfill the credit needs of individual customers and diverse sectors of the economy.
Consequently, its performance has significantly gained momentum.
In a statement accompanying the Microbank’s financial results for sixteen months to June 2023, Innbucks chief executive officer, Daisy Zinyemba, said Innbucks will continue to channel its investment towards technology that is the core focus of the financial services firm in delivering services.
She noted that the moves were microfinance’s strategic foundations as it intends to increase customer activity and grow a profitable lending book.
“Microbank continues to roll out various products as part of its strategic focus. Electricity sales, nano loans, and exciting customer loyalty products are some of the services earmarked for the second half of the 2024 financial year.
“Innbucks remains committed to providing innovative products and services and has partnered with several key stakeholders to ensure that the needs of the diversified clientele base are met,” said Zinyemba.
Ralph Watungwa, Innbucks chairman said the Microbank will continue to seek growth in its transactional revenue.
“Investment in technology will continue to be the core focus of Innbucks strategy to deliver financial services,” he said.
In the half-year period to December 2023, Innbucks recorded a 186 percent core capital position growth to US$ 7,41 million from US$ 2,6 million reported in June 2023 as the financial entity continues on a growth trajectory.
The US$7,41 million figure is above the Reserve Bank of Zimbabwe (RBZ) minimum requirement of US$5 million.
Watungwa attributed the progression to organic growth of the business and funded income generated through various sources of funding including Central Bank support, offshore borrowings, and fixed-term deposits that were mobilised over the period.
In that half-year period to December 2023, Innbucks posted a $41,25 billion profit after tax translating to a 263 percent growth from the same period in 2022.
According to Watungwa, the buoyant performance is a reflection of the microbank’s business model’s potential and the ability to adapt to the challenging and versatile economic environment.
Fee and commission incomes surged by $43,46 billion, owing to a strong performance from both the Innbucks wallet business and a wide suite of structured finance and international banking offerings.
In that regard, microbank said it will be directing efforts towards growing these lines through dedicated business development initiatives.
Net interest income grew 12 877 percent to $93 billion compared to $71, 9 million posted in the same period in the previous year which is credited to deliberate efforts by the MicroBank in channeling out credit to individuals, small to medium enterprises, and the corporate sector.
“This growth in net interest income was achieved both organically and through lines of credit from offshore and the Central Bank whose continued support is appreciated,” added Watungwa.
Operating expenses grew in line with the entity’s expectations and the business needs, particularly, marketing, information technology costs and staff costs.
The Microbank, however, noted that the bank continues to observe headwinds that might negatively affect the entity’s capital, but hinted at crafting mechanisms to preserve the capital through hedging and other effective means of capital preservation.
It also acknowledged the government’s implementation of monetary and fiscal policy measures that are directed at stabilising exchange rates and moderate inflation rates.
No dividend was declared by the Microbank in the period under review.
