Kenya: Faulu Posts a 68% Rise in Profit to Hit Sh482 Million

Nairobi — Microfinance lender Faulu Kenya has posted a 68 percent increase in profit-before-tax for the financial year ended December 31, 2019, to reach Sh482 million up from Sh287 million the previous year.

The Bank, a member of Old Mutual Group, attributed the strong performance to a 20 percent 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 4 percent largely as a result of a system upgrade implemented in 2019.

The bank's non-performing loans ratio improved from 13.07 percent in December 2018 to 12.1 percent in December 2019 primarily as a result of improved underwriting and loan collection.

Total assets grew 9 percent from Sh27.2 billion to Sh29.7 billion in 2019 during the period under review driven mainly by 10 percent growth of the loan book. In addition, customer deposits rose 8 percent 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," said Apollo Njoroge, the Managing Director Faulu Microfinance Bank.

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 8 percent.

"This solid 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," said Mr. Njoroge, citing 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.

Faulu currently has a distribution network of 61 outlets and over 500 agents countrywide and plans to expand its footprint with an eye on giving its customers more convenience.

See What Everyone is Watching

More From: Capital FM

Don't Miss

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.