ExpressCredit raises P103m for local microlending

Charlotte Mathula
Charlotte Mathula

Local microlender, ExpressCredit has raised $9 million (P103 million) in funding to support its loan book growth and reach in the market, BusinessWeek has learnt.

ExpressCredit is among the country’s top 20 microlenders, whose combined assets were measured at P6.3 billion last year.

Local microlenders are not deposit takers and thus raise the funds they require for the lending activities through external financiers. ExpressCredit’s latest boost has come from a US-based alternative asset manager.

On Tuesday, the company’s marketing manager, Tshepiso Goitsemang, told BusinessWeek the new funding would result in an overall reduction of ExpressCredit’s cost of finance.

“This will allow us to continue innovating and introducing new products to solve the financial needs of our customers aligned with our mission to secure financial freedom for local communities underserved by mainstream banks and financial providers,” she said.

She added the continued partnerships for funding from both local and external sources indicated investor confidence in ExpressCredit.

“Having been in the market for over four years, we have a prominent footprint and established partnerships, both from a funding diversification standpoint and loan book growth opportunities,” Goitsemang said. “Our focus is on growing the loan book and ascertaining and measuring social impact in the communities in which we operate.

ExpressCredit CEO, Charlotte Mathula said Botswana is set for strong economic growth, and the company anticipated that the demand for consumer loans would increase with the new funding facility.

“The new loan funding programme is well-timed to diversify funding opportunities and support ExpressCredit and its ambitious growth plans in Botswana. “It will enhance our liquidity and further strengthen our market position as one of the leading specialty finance providers,” she said.

Mathula previously told BusinessWeek that ExpressCredit was on a transformative journey with an ambition to not only provide access to finance but to develop relevant solutions that meet customers’ financial needs.

The country’s microlenders have enjoyed healthy growth in recent years, with their collective profits increasing from P687 million in 2019 to P735 million in 2020.

The Non-Bank Financial Institutions Regulatory Authority (NBFIRA), which oversees the microlenders, recently noted that while the sector’s liabilities rose by 20.7% last year due to pandemic-related pressure on its resources, industry players’ ability to convert their loan book into revenue had improved.

NBFIRA also noted an increase in the sector’s reliance on debt financing last year, which the regulator attributed to the impact of COVID-19 affecting the normal servicing of financial obligations.

“The microlending industry remained generally solvent and profitable... all systemically important microlenders managed to meet the minimum capital adequacy ratio,” the regulator said in the 2021 Annual Report released recently.

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