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Microfinance lender Faulu Kenya has posted a 68 per cent increase in profit-before-tax for the financial year ended December 31, 2019, to reach Sh 482 million up from Kshs.287 million the previous year.
The Bank, a member of Old Mutual Group, attributed the strong performance to a 20 per cent increase in interest income, improved operational efficiencies and growth of its loan book, from Sh 19.18 billion in 2018 to Kshs.21.05 billion in 2019.
Operational and administrative expenses during the period declined by 4 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.
The lender’s total assets grew 9 per cent from Kshs.27.2 billion to Sh 29.7 billion in 2019 during the period under review driven mainly by 10 per cent growth of the loan book. In addition, customer deposits rose 8 per cent from Kshs.18.5 billion in 2018 to Kshs.20.1 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 per cent.