Faulu Microfinance Bank, a subsidiary of the UAP Old Mutual Group, has posted a 73.3 per cent increase in net profit for the year ended December 31.
Profit after tax edged up to Sh330.1 million compared to Sh190.4 million same period in 2018.
The bank has attributed the strong performance to a 20 per cent increase in interest income, improved operational efficiencies and growth of its loan book, from Sh19.18 billion in 2018 to Sh21.05 billion in 2019.
Operational and administrative expenses during the period declined by four per cent largely as a result of a system upgrade implemented in 2019.
The bank’s non-performing loans ratio improved from 13.07 per cent in December 2018 to 12.1 per cent in December 2019 primarily as a result of improved underwriting and loan collection.
Total assets grew nine per cent from Sh27.2 billion to Sh29.7 billion driven mainly by 10 per cent growth of the loan book.
In addition, customer deposits rose eight per cent from Sh18.5 billion in 2018 to Sh20.1 billion.
“We continue to make strategic investments in improving the overall customer experience. A sharp focus on creating value for our customers translated into a strong performance in 2019,” managing director Apollo Njoroge said.
He cited the bank’s focus on technology as a key factor in growing non-interest income, mainly transaction and service fees, with net non-interest income climbing percent.
“Our focus going forward will be on leveraging technology, strategic partnerships and innovative product offerings tailored to the unique needs of our customers,” said Njoroge.
He cited the bank’s recent partnership with USAID to provide financial services and training on agribusiness to more than 10,000 farmers in Busia and Homa Bay counties over the next three years, as one of key drivers for growth.
Faulu currently has a distribution network of 61 outlets and over 500 agents countrywide and plans to expand its footprint countrywide.
It is banking on traders, Micro, Small and Medium Enterprises (MSMEs) and farmers to grow.
“We are offering tailored products that respond to the unique needs of this overlooked and misunderstood market segment which includes investing in training our customers,” explained Njoroge.
The bank has also invested in bancassurance to enhance insurance uptake among its customers.
It also inked a deal with auto dealer Car and General that enables customers in the transport business to purchase motorcycles at discounted prices.
