Improved mobile payment spurs Fortis Microfinance to growth

A secure, scalable mobile payment platform for both online and proximity transactions have spurred Fortis Microfinance Bank Plc to growth amid economic lethargy as the bank continues to increasingly use the latest technology to bolster top lines.

This means the stellar performance by the bank validates the national license granted to it by the Central Bank of Nigeria (CBN) to operate across the country.

For the year ended December 2015, Fortis Microfinance’s gross income increased by 8.33 percent to N3.64 billion from N3.36 billion, the corresponding year of (FY) 2014.

Also, Interest income was up by 12 percent to N2.80 billion, which means there are remarkable improvements in interest income on loans and advances.

“Our success story over the years will be replicated nationwide and we will also through the use of technology bring banking to the door step of all Nigerians, particularly those at the base of the economic pyramid who are either underserved, underbanked or outrightly disenfranchised by the conventional financial service providers,” said Mr. Felix Achibiri, the bank’s chairman.

The second largest microfinance bank in Nigeria to be listed on the Nigerian Stock Exchange is also the only microfinance bank in Nigeria to be issued a Mobile Payment license by the apex bank.

Experts are of the view that Fortis recorded the upward growth trajectory at the top lines amid a flurry of operating and macroeconomic challenges stunting the growth of businesses in Africa’s largest economy.

One of the factors militating against the growth of microfinance business in Nigeria is lack of finance needed to expand financial services to the poor.

Furthermore, high risk, heavy transaction cost and mounting loan losses make it practicably difficult for credit facilities to reach the poor rural dwellers. Even if they get such loans, most people see it as their own share of the national cake and do not see reasons or the rationality of paying back.

While lower interest would enhance loan repayment, most customers indicated that the accessibility and availability of funds are crucial to easing their pains.

With inflation figures hitting 13.70 percent in the current month from 12.80 percent in February, the Abuja based bank may be forced to hike interest rates to curb inflation.

This means the rate at which commercial banks will extend credit facilities to microfinance banks will spike and the latter may shift the burden on customers.

Further analysis of Fortis Microfinance net income reduced by 13.63 percent to N583.70 million in 2015 from N674.51 million in 2014. Operating expenses were up by 14.37 percent to N583.70 million in 2015 as against N674.51 million in 2014.

The bank’s loans and advances to customers increased by 18.67 percent to N13.91 billion in 2016 from N11.73 billion in 2014. Deposits from customers were up 4.69 percent to N10.03 billion in the period under review compared with N9.58 billion in 2014.

Fortis Microfinance’s share price closed at N5.15 on the floor of the exchange, while market capitalisation was N11.77 billion.

BALA AUGIE