MICROFINANCE Institution GetBucks Zimbabwe plans to list on the Zimbabwe Stock Exchange mid next month after it recently launched a bid to raise $3,2 million in an initial public offering.
The money-lending institutions began operations in the country three years ago.
The Initial Public Offering (IPO) is the first since the Philip Chiyangwa-owned engineering ZECO Holdings listed in 2007.
Mauritius registered GetBucks Limited owns 55 percent shareholding of the local unit while Zimbabwean investment firm, Brainworks owns 34.06 percent, with the remainder held by various shareholders, including pension funds and insurance firms.
Of the amount being sought, $2,9 million will be for working capital with $300,000 for meeting costs associated with the IPO and listing.
Brainworks chief executive George Manyere told an online publication, The Source recently that GetBucks would consider issuing more shares in the future but added that other companies should to come on board to improve investment alternatives on the ZSE, adding that none of the current major shareholders wanted to sell-off.
“We’re not cashing out, none of the founding shareholders are. We believe that there’s a lot more value going into the future and we’re committed for the long-term,” he said.
GetBucks Zimbabwe managing director Walter Kambwanji was reported saying the micro-finance sector loans had averaged $160 million annually since 2013 and had potential to grow further.
“We think there’s scope to grow the sector even more. What we see in our business is that there’s high demand for salary based loans but because industry hasn’t been performing, the informal businesses are also growing and they would need access to banking and financial products,” Kambwanji told analysts at a recent briefing.
“We think the listing will increase the visibility of the GetBucks brand to both the public and private sectors leading to new business opportunities. We also wish to attract focused and permanent capital through the IPO and ability to raise cheaper finance.”
The listing would also help the company comply with new ownership requirements of a deposit-taking institution where Brainworks — as a non-financial company as defined by the Reserve Bank — cannot hold more than 25 percent shareholding.
It has 20,000 customers with 13 branches in major centres in Zimbabwe.
Its loan book stands at $11,6 million with the non-performing portion of that at two percent, much lower than the 15 percent in the banking sector.
“It’s a profitable business that has demonstrated remarkable growth in the three years that we’ve run it. It’s a dividend-paying company and cumulative dividends so far dished out to shareholders is $2 million,” said Kambwanji.
The company also runs a successful promissory programme with pension funds.
The promissory notes attract 15 percent interest per annum and Kambwanji said there remains huge interest in the programme.
Chief finance officer Paul Soko told the briefing that the company had targeted to pay 25 percent of profits to shareholders because ‘‘this is a very profitable company.”
In the full-year to June, GetBucks reported a $6 million profit before tax from $2,3 million the previous year.
In 2013, the company made a loss of $183,000.
Manyere said the company was at the right stage of development to list.—The Source.