HARARE – Intergrated financial services group, Old Mutual Zimbabwe (OMZ), has recorded $92 million profit in the full year to December 2016 compared to $13,3 million registered in prior comparable period.
“This performance was driven by strong performance in the banking, life insurance and short-term insurance businesses as well as the recovery of the stock market towards the end of 2016,” the group’s chief executive Jonas Mushosho said yesterday.
Meanwhile, the diversified conglomerate has been given the green light to launch its micro finance unit, which is earmarked to fund the informal sector.
Mushosho said the group’s subsidiary will commence operations next month and open to the public with an interest rate of five percent per month.
“So we believe we are coming at an affordable rate, our money that we have put there will be close to the demands, if the demand is there we do have the capital and resources to meet demand and support lending,” he said.
The micro finance institution — to be named Old Mutual Finance (OMF) — has already recruited most of its staff complement.
Mushosho — who was last year appointed Old Mutual Emerging Markets regional chief executive for southern and east Africa — said the institution will focus on lending only.
“…we are already taking deposits through CABS . . . we try to make sure that we don’t duplicate the same thing in different places. We have taken note of the specialised nature of the lower end of the market. So this business will use a model different from CABS and we have trained staff on that model,” he said.
Although there is a high risk in dealing with the informal sector, Mushosho said the group would offer affordable financing to curb the risk.
“The risk in the sector is always taken into account in the way you price your products, if it is loans, the interest rates prices, the level of risk that you are seeing on those products all comes down to the issue of pricing,” he said.
Central bank data shows that local micro finance institutions, which traditionally target low income households and micro, small and medium enterprises (bottom of the pyramid), recorded increase in licensed players for the period to June 2016, from 152 at the close of 2015 to 167.