The Sunday Mail
Livingstone Marufu
MICROCRED Zimbabwe, formerly MicroKing, is confident of regaining lost market share, riding on competitive interest rates that are as low as five percent compared to others that are pegged at 25 percent, and the deep pockets of its funders, a top official has said.The microfinance institution believes that given the available financial and technical resources from France-based Microcred Group and Tunisia-based AfricInvest Financial Sector Fund, the local unit is poised for growth.
The two firms are reportedly planning to pump over US$20 million into the Zimbabwean micro-lender in the next two years as well as upgrade it into a microfinance bank.
Microcred Zimbabwe has opened nine branches and recruited 40 people.
Last week, Microcred Zimbabwe acting MD Mr Lloyd Borerwe told The Sunday Mail Business that the institution was employing a variety of strategies, including slashing interest rates, to bring back old clients and attract new ones.
“Considering that the company had lost significant value, it was necessary to execute a post-acquisition turnaround and value creation plan that enhanced operations and positioned the company for growth.
“The new shareholders have already provided both equity and debt funding in these initial months to support the growth of the business. Additional investment is expected in the coming months as well.
“We have, as a business, started to leverage the technical capabilities of the new shareholders and this will in no doubt improve the efficiency of our business model to better serve our customers,” said Mr Borerwe.
Microcred says rebranding will help it to be strategically positioned to retain old clients and bring in new customers. Mr Borerwe said they were planning to solidify their position in the market by providing capital to local businesses to drive economic growth. He expects Microcred to have significantly redeemed its lost market share by year-end.
Without providing statistics, Mr Borerwe said their month-on-month results showed “impressive signs of growth, demonstrating the huge potential that lay within the informal sector and SME business”.
“We are expected to gain impetus once we officially launch our rebranding and activation campaign,” he said.
Microcred, which was created in 2005 by Arnaud Ventura with the support of Positive Planet and several institutional investors, is a digital finance company focused on financial inclusion in Africa and China.
The group offers financial services to clients in emerging markets, particularly the unbanked and SMEs. It is currently operating in Senegal, Nigeria, Cote d’Ivoire, Madagascar, Mali, Tunisia, Burkina Faso, China and Zimbabwe.
MicroKing was owned by AfrAsia Kingdom Zimbabwe Limited and was acquired by Microcred after hurtling into operational challenges which resulted in AfrAsia Bank surrendering its operating license.
Microcred owns 70 percent of the local business while AfricInvest owns the remainder. AfricInvest is a pan-African private equity fund manager, managing over US$1 billion investments across the continent.
