GetBucks Microfinance Bank’s loss widened 5911% in the three months ended September 30,2020 to ZWL$102.2m from ZWL$1.7m recorded in prior comparative period due to monetary assets which lost power during the COVID-19 pandemic lockdown.
Total income for the lender shrunk 39% during the reviewed period to ZWL$57.4m from ZWL$93.7m in the same period last year to revaluation adjustments in investment property and foreign currency balances held by the bank.
“The increase was due to the loss in purchasing power of the bank’s total assets which were mainly driven by monetary assets,” chief finance officer, Patrick Mashinga said.
He said inflation adjusted loss after tax for the nine month period was ZWL$54.0m.
Shareholders’ funds closed the quarter at ZWL$177.6m.
The Reserve Bank of Zimbabwe announced a US$5m minimum capital level with effect from December 31, 2021.
Mashinga said GetBucks was pursuing measures to ensure it meets the minimum capital threshold prior to the deadline.
GetBucks was licensed as an Authorised Dealer on August 12, 2020 which makes it able to offer banking services to exporting clients and offshore payment services to importers as well as participate on the auction system on behalf of clients.
The bank will participate in the foreign currency market and earn revenue, Mashinga said.
The foreign exchange auction system was introduced by the central bank in June to replace the fixed exchange rate.
Mashinga said during this period, the RBZ maintained a strong grip on reserve money growth resulting in a slow increase in money supply growth, thereby stabilising exchange rates.
The tight monetary position made it harder for the bank to access wholesale lines of credit.
GetBucks said the environment has been tough for micro-lending owing to inability to keep up with inflation and the attendant rate of increase in expenditure.
In the outlook, the bank’s strategies will anchored on increasing transactional income from retail business.
The financial institution said access to new funding lines and cost containment will be key to the bank’s growth during the next quarter.
GetBucks has instituted measures to manage costs during the year in order to mitigate hyperinflation and to right size the company in line with reduced levels of activity.