EmpowerBank seeks $1bn capital for youths

EmpowerBank, 100 percent owned by the Government, is a registered micro bank regulated by the Reserve Bank of Zimbabwe (RBZ) and formed with the purpose of providing social and financial solutions to the financially excluded population with a greater focus on the youth.

Micro-finance bank EmpowerBank says it is awaiting the release of $1 billion capital from the Government, which will enable it to achieve the mandate of youth empowerment, a demography the financial institution sees as key to economic development.

EmpowerBank, 100 percent owned by the Government, is a registered micro bank regulated by the Reserve Bank of Zimbabwe (RBZ) and formed with the purpose of providing social and financial solutions to the financially excluded population with a greater focus on the youth.

The bank’s chairperson Mrs Rudo Kumirai, in a statement of financials for the half year period to June 30, 2022 said the outstanding disbursement $300 million was from the 2022 national budget while $700 million was allocated through the supplementary budget.

“The microfinance bank is grateful for Government support as evidenced by the capital injection of $300 million, which came in March 2022 with the other $400 million coming in July 2022.

“This should come as a major boost for operations for the institution and will help to achieve the mandate of youth empowerment,” she said.

EmpowerBank through its mandate has to date disbursed over $200 million to various youth empowerment initiatives in form of loans which is contributing to Zimbabwe’s Vision 2030 of building a middle-income economy by the year 2030.

The bank’s chief executive, Mr Shadreck Mhembere, said the micro finance bank would continue extending its geographical reach through the roll-out of agents to all provinces.
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He said that the micro-finance bank was upbeat about the second half of the year as it maintains focus on empowering young people.

“The Youth Business Starter Pack (YBSP) product is being pushed to all economic segments as currently notable successes have been recorded in agriculture sector, tobacco and horticulture as well as the SME sector.

“Value chain arrangements will continue to anchor the loan product offering to ensure ready markets for the youth whilst ring fencing our lending,” he said.

During the period under review, the micro-finance bank reported a net interest income surge of 122 percent to $81,2 million from $38,3 million in historical terms.

Total revenue for the bank also grew by 218 percent from $41,2 million in June 2021 to
$131 million in June 2022.

Expenditure also rose by 242 percent from $92,9 million to $317,7 million in the same
period.

Loans and advances increased by 21 percent from $216 million in December to $261
million in June 2022.
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Deposits also rose by 78 percent from $32,9 million in December 2021 to $46,6 million by
June 2022.

Mr Mhembere said the micro bank’s performance suffered a slow start as a result of low liquidity during the first quarter with capital of $300 million released in March 2022.

He said that the fast depreciation of the local currency in the period under review resulted in the business quickly losing value as most of the trading was in local currency.

“The foreign currency transactions through the World Remit money transfer agency and
the bureau de change business accounted for less than 20 percent of the total revenue
transactions,” Mr Mhembere said.

He noted that even though the business levels picked up in the second half, the bank, the bottom line was however still weighed down by operating expenditures, which resulted in a loss position for the period.-The Herald