Banking: Faulu posts Sh482 million profit

Microfinance lender Faulu Kenya has posted a 68 per cent increase in profit-before-tax for the financial year ended December 31, 2019.

The lender’s profit rose to Sh482 million up from Sh287 million during the previous year.

The bank, a member of Old Mutual Group, attributed the 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.

“Focus on creating value for our customers translated into a strong performance in 2019,” said Faulu Microfinance Bank Managing Director Apollo Njoroge.

He cited the bank’s focus on technology as a key factor in growing non-interest income, mainly transaction and service fees, which saw net non-interest income climb eight per cent.

The bank’s operational and administrative expenses during the period declined by four per cent, largely as a result of a system upgrade implemented in 2019.

The micro-finance bank's non-performing loans ratio also improved to 12.1 per cent in December 2019, up from 13.07 per cent in the previous year due to improved underwriting and loan collections.

Total assets grew 9 per cent to Sh29.7 billion during the period under review from Sh27.2 billion in 2018, driven mainly by 10 per cent growth of the loan book.

Besides, customer deposits rose 8 per cent to Sh20.1 billion up from Sh18.5 billion during the previous period.

“This performance sets a strong foundation for the next phase of our growth strategy. Our focus going forward will be on leveraging technology, strategic partnerships and innovative product offerings tailored to the unique needs of our customers,” he said

The bank has partnered with USaid to provide financial services and training on agribusiness to more than 10,000 farmers in Busia and Homa Bay counties.