MICROKING Finance, the micro enterprise finance division of Kingdom Bank Ltd, has disbursed more than 7 000 loans worth about $300 million with a 99,6% r
epayment rate, says Lysias Sibanda, Kingdom Financial Holdings Ltd (KFHL) chief executive officer.
Kingdom Bank recorded attributable profits of $1,9 billion (December 31 2001 – $2,3 billion) and $2 billion (December 31 2001 – $889 million) in inflation-adjusted and historical cost terms respectively.
Thus the company contributed 59% to group earnings (December 2001 – 59%) in historical cost terms.
Sibanda said, established in October 2001, MicroKing’s mission was to provide financial services to the informal sector in a commercially viable manner.
In his CEO’s report to shareholders made available this week Sibanda said MicroKing’s core product as it entered the market was the working capital loan and during the year under review, the division disbursed over 7 000 loans worth about $300 million with loan sizes ranging from $5 000 to $500 000.
He said: “The product is well-structured and priced in a manner that will ensure long-term survival of the micro enterprises. The MicroKing service was well-received and respected by the market and the repayment rate at 99,6% was rewarding.”
Having begun operations in October 2001 MicroKing was officially launched in May 2002 at Stodart Hall in Mbare.
The initiative was launched with technical assistance from Accion, a Washington-based micro enterprise finance consultancy, Vulindlela, Accion’s partners based in South Africa and the United States Agency for International Development.
Sibanda said: “The location of MicroKing branches in the midst of and near micro enterprise clusters signifies the seriousness with which Kingdom Bank Ltd views the need to support the informal sector and the long-term vision that the group has as demonstrated by the degree of permanency through investment in proper branch structures in the heart of high density areas where formally, the established commercial banks network feared to tread.”
He said MicroKing now had eight branches, three in Harare and one each in Chitungwiza, Gweru, Bulawayo, Mutare, and Masvingo.
“This new investment (MicroKing) symbolises both the human face of the Kingdom group and the realisation that it is time the financial services sector acknowledged the existence of the informal sector and the vital role that this sector plays in an economy where the corporate sector is fast shrinking due to prevailing unfavourable macroeconomic conditions,” Sibanda said.
He said 2003 would be charcterised by consolidation of the gains achieved in 2002 with focus on processes and product refinement and brand buildings as the division moved towards financial sustainability.