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Getbucks Plots To Outmuscle Rivals

GetBucks Microfinance has pinned its hopes on cutting edge risk management technology, to sustainably gain leverage in the country’s increasingly congested microlending market.

GetBucks, a subsidiary of a Luxembourg-based mid-tier player, is battling for elbow room in a tightening market where other regional and global brands are fighting for traction.

With local consumers already heavily indebted to banks, retail hire purchase, insurance and others, and with more workers leaving formal employment for informal, analysts have said microlenders are fishing in an increasingly shrinking pond.

Aggressive microlenders have found themselves struggling to recover their outstanding loans to clients, impacting on their survival.

On Tuesday, GetBucks managing director, Martin de Kock said a Fintech model known as Jessie would give the microlender the upper hand in the battle for market space.

Jessie is a proprietary credit decision and scoring technology platform based on artificial intelligence algorithms. It considers a number of factors such as the customer’s behavioral, transactional and credit bureau data as well as employment information, before making a decision on credit extension.

“There will always be competition, but have to focus on increasing our competitive edge on other levels. We believe the Fintech model, which is

faster, is currently our competitive edge and through the raising of our capital and the bond listing we were able to get our rates competitive with other microfinance companies,” he said.

In the year to December 2017, GetBucks was able to raise its loan book by 75% to P990 million, while impairment-to-revenue ratio actually decreased from 14% to nine percent. The microlender posted a full year profit of P16 million, being almost three times higher than the previous year.

On his part the group finance director Marshal Chimedza said that their cost of funding is currently sitting at 17%, noting that in the medium to long term that plan to reduce this level cost of funding as they feel they need to remain competitive in the market.

“The idea is to possibly raise funding that would allow us to refinance possible expenses. We have plans to expand the business and possibly injecting some into the market as we might be looking at P50 million capital raising plans,” he said.




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