FY 2016 at a glance
The global microfinance market continued its growth path last year advancing around 15%, whereby the Asian Pacific market showed superior growth of c. 30%. Latin America (10%), Middle East & North Africa (15%), Eastern Europe (5%), Sub Saharan Africa (10%) and Central Asia (10%) all showed lower growth rates.
CreditAccess improved its market share in all three countries it operates in, increasing its loan portfolio by 56% organically, and its client base by 45% to 1.45 million customers. CAA-OP reported the strongest growth in loan portfolio (301%) albeit from a relatively low level since the Company was still in its start-up phase. CAA-GK reported a prosperous growth of 56%, while CAA- BAV increased its loan portfolio by 51%.
Revenues for interest income and fees increased to € 74.3 million (+81%) versus € 41.1 million in FY 2015 driven by a strong growth in loan book, which was the result of a 45% increase of the client base combined with a 10% higher average ticket size. Total interest expenses came in at € 37.3 million (+68%). The increase was due to a higher debt, but was partly compensated by a lower average interest rate.
Consequently, total income amounted to € 37.4 million, an increase of 91% compared with FY 2015. A gross result of € 36.4 million (+89%) was the result of a favourable development in total income in combination with higher loan loss provisions (€ 1.0 million vs. € 0.4 million in FY 2015), driven by a 56% increase in loan portfolio to € 360 million. OPEX as percentage of total income dropped to 83.6% versus 88.6% in FY 2015 benefitting from a larger scale of operations and subsequent synergies on cost containment.
Operating results advanced by 171% to € 5.1 million fuelled by higher total income and strong cost containment. Operating margin amounted to 13.6%, a clear improvement compared to FY 2015 (9.6%).
After the results from value adjustments and taxation, the net result of the Group came in at € 2.9 million negative compared to € 3.6 million negative in FY 2015. The total comprehensive income result was also slightly negative at € 290,431 compared with € 19.9 million positive for FY 2015. In the FY 2016 the results were highly influenced by extraordinary and nominal items, mainly linked to the contracts for the purchase of the non controlling interest (or minority stake) of Grameen Koota and to the issued bonds. Had the extraordinary items not been there, the net results would be € 4.5 million positive and the total comprehensive income would be € 7.1 million positive.
CreditAccess and Olympus Capital Asia (“Olympus”), a leading middle market Pan-Asia private equity firm, established in December 2015 a strategic partnership in which Olympus invested US$ 30 million to fund the expansion plans of CreditAccess.
CAA-GK successfully completed the migration to a new IT system with the adoption of an advanced Core Banking Solution Platform. The new platform will support the planned portfolio growth and the development of new individual lending products. CAA-GK was selected as the best microfinance organisation in India in 2015.
CAA-BAV is at an advanced stage to receive Client Protection Certification. In December 2015, CAA-BAV received the pre-assessment report of the Client Protection Certification (“CPC”). CPC is an independent evaluation, which is performed by Smart Microfinance, to publicly recognise financial institutions that meet adequate standards of care in treating clients. As soon as CAA-BAV is granted this CPC certificate, it will be the first certified micro-finance institute in Indonesia.
CAA-OP tripled its number of branches to 110 in just twelve months. The Company can now leverage its scale to become more efficient and profitable in the foreseeable future.
Equitas Holdings Pvt Limited (India) completed a very successful IPO on 21st April 2016 on the Mumbai Stock Exchange and even after the listing the stock price has maintained a remarkable positive trend. This event marks a very important validation point for the industry as a whole.