Farai Mabeza, Senior Staff Writer 
MICROLENDER, Success Microfinance Bank (Success) incurred an inflation adjusted loss of $196 million for the year ended December 31, 2020, weighed down by cost increases.
Zimbabwe experienced its second episode of hyperinflation in a decade last year, with inflation peaking at 836 percent in July.
Success last week said its operating expenses were up by 486 percent to $41 million during the year.
Maureen Chitewe
“Inflation pressures continued to weigh down incomes… driving up operating expenses,” board chairperson Maureen Chitewe said in a statement accompanying the institution’s results.
She said the microlender’s interest income declined by 49 percent during the year to $39 million.
On a historical basis, however, Success reported a profit of $60,6 million for the year compared to a $26,6 million surplus achieved in the prior comparative period.
“This improvement was as a result of cost containment initiatives, growth interest income and other non-operating gains,” Chitewe said.
She said there was a 50 percent decline in total assets from $559 million in 2019 to $287 million as at December 31, 2020.
“The decline in the statement of financial position was mainly due to shrinking of the loan book and loss of value in receivables,” Chitewe said.
The chairperson said the microfinance bank would continue to focus on digital transformation in order to meet client expectations and expressed optimism that current government policies would bring some ease in the business operating environment.
“However, we are hopeful that the current vaccination programme and economic policies will improve economic activity going forward,” she said.
“The microfinance bank will continue to seek opportunities to improve revenues, cut costs and preserve capital.”
Success is the successor to what was previously known in the market as Collarhedge Finance (Collarhedge) which was licensed and started operating in 2011 as a credit only microfinance institution.
Around 2015, Collarhedge applied for an upgrade from a credit only microfinance licence to a deposit-taking licence after its portfolio surpassed 36 000 loans, with demand consistently above available funding from shareholders and bankers.
