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GetBucks net loss widens by 193,26%

Earlier this month, GMBL announced that it was seeking to raise capital to meet the US$5 million regulatory requirement by year-end.

MICROFINANCIER, GetBucks Microfinance Bank Limited (GMBL)’s net loss widened by 193,26% to $171,29 million in the first quarter of this year, as revenues lag operational expenses, threatening efforts to meet regulatory capital requirements.

Earlier this month, GMBL announced that it was seeking to raise capital to meet the US$5 million regulatory requirement by year-end.

The micro-lender advised its shareholders that it was in the process of negotiating transactions as part of its capital raising initiative.

The planned capital raise will help reduce the micro-financier’s cost of funding, as well as capacitate its expansion drive.

However, in its trading update for the first quarter ended March 31, 2023, GMBL said its net loss widened from a 2022 comparative of $58,41 million.

The highlights were presented in historical terms due to the move by the authorities to discontinue the publishing of inflation data, which is required to construct indices for inflation adjusted accounts.

“However, the growth in revenue did not match the growth in operational expenses resulting in an increased loss,” the lender said.

Resultantly, GMBL directors did not declare a dividend during the reporting period.

The loss-making position widened despite an increase in loans for the micro-lender to nearly $2 billion, during the quarter, from a 2022 comparative of $225,85 million.

Further, the loss was despite a 246,48% increase in revenue to $511,45 million during the period from a 2022 comparative of $147,61 million.

“The central bank continued to maintain a tight monetary policy stance throughout the first quarter of 2023. Though the bank policy rate was reduced from 200% to 150%, the new policy rate of 150% was sufficiently high enough to dissuade speculative borrowing,” GMBL said.

“However, despite the tight monetary policy stance, the ZWL [Zimbabwe dollar] continued to slide against the USD [United States dollar] causing an increase in operational expenditure throughout the economy. The ZWL continues to be under pressure and this was the biggest challenge affecting business viability throughout the economy.”

Despite the local currency taking a beating from inflation and losing value against other global main currencies, the micro-financier promised not to relent in its efforts to maintain capital and protect shareholder value.

“The environment is projected to continue to be challenging in the short to medium term as authorities try to arrest the rapid devaluation of the ZWL. Naturally in such an environment, the demand for loans is very high,” GMBL said.

“The institution will continue monitoring the impact of the measures to stabilise the exchange rate and macro economy as given by the authorities, to manage any emerging risks while taking advantage of any opportunities that will emerge.”

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