GetBucks banks on US$ business

GETBUCKS Microfinance Bank (GetBucks) is optimistic that its newly charted US dollar business avenues will cushion it from challenges in Zimbabwe’s broader economy for the foreseeable future.
The institution reported an inflation-adjusted loss of $44 million for the half-year to June 30, 2022, which chairman Rungano Mbire said was on the back of depressed lending due to the low disposable incomes affecting the civil servants’ loan affordability and “the fact that the depreciation of the Zimbabwe dollar meant that the loan size had signi­ficantly reduced in real terms”.
“The board expects the operating environment to remain tight in the short to medium term; however, the bank has attained new lines of credit and has since started issuing USD loans which will improve profi­tability,” Mbire said in a statement accompanying the bank’s results.

“Investment in technology will continue to be the core focus of the bank’s strategy to deliver ­financial service as the microfi­nance bank seeks to grow its transactional revenue.”
During the period under review, the Reserve Bank of Zimbabwe’s tight monetary policy framework continued with the aim of restoring confi­dence in the local currency and promoting its usage. The measures included the hiking of interest rates to stem speculative borrowing.
The measures, however, also affected liquidity in the economy.
“The liquidity challenges coupled with the increase in the minimum lending rates will see most businesses shifting their operations from local currency to foreign-denominated currencies,” GetBucks’ managing director Edwin Chavora said.
“The microfi­nance bank has positioned itself in a manner that ensures business continuity in this regard. The completion of the capital raise exercise will build the microfi­nance bank’s expansion drive,” Chavora added.
Meanwhile, the bank’s results showed that its non-funded income grew “in line with the strategic vision of diversifying the top line”.
Total assets grew by 13 percent to end the period under review at $2,5 billion “on the back of a diversifi­ed asset portfolio denominated in foreign currency”.
“This was in line with the value preservation strategy adopted by the micro­finance bank to combat the value-eroding effects of inflation,” Mbire said.
Deposits declined by seven percent from the December 2021 position of $173 million to close at $160 million. “This is reflective of the liquidity challenges experienced in the market and also the reluctance of clients holding on to balances towards the RBZ auction due to settlement delays,” the chairman said.
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