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 Kshs. 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 Kshs. 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.

Total assets grew 9 per cent from Kshs.27.2 billion to Kshs. 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.

“This solid performance sets a strong foundation for the next phase of our growth strategy. Our focus going forward will be on leveraging technology, strategic partnerships and innovative product offerings tailored to the unique needs of our customers,” said Mr. Njoroge, citing the bank’s recent partnership with USAID to provide financial services and training on agribusiness to more than 10,000 farmers in Busia and Homa Bay counties over the next three years.

Faulu currently has a distribution network of 61 outlets and over 500 agents countrywide and plans to expand its footprint with an eye on giving its customers more convenience.

In addition, the bank has rolled out a phased marketing campaign to refurbish its outlets and transform Sales and Service Centers into self-sufficient banking branches offering all banking services.

Faulu is also banking on traders, Micro, Small and Medium Enterprises (MSMEs) and farmers to grow. “We are offering tailored products that respond to the unique needs of this overlooked and misunderstood market segment which includes investing in training our customers,” explained Mr. Njoroge.

The bank has also invested in bancassurance to enhance insurance uptake among its customers by creating awareness of the benefits of insurance to small businesses and entrepreneurs.

The bank also inked a deal with auto dealer Car and General that will enable the bank’s customers in transport business purchase motorcycles at discounted prices.