Yambukai to grow footprint to all provinces

MICROFINANCE entity Yambukai Finance says it intends to grow its network to all the 10 provinces of the country as it moves to grow its footprint in the local market.

The microfinance entity has branches in Chitungwiza, Masvingo, Gweru, Mutare, Kwekwe, Gokwe, and three branches in Harare.

The firm indicated that it is looking forward to growing its footprint to Bulawayo, Marondera, Chiredzi, Chinhoyi, Victoria Falls, and other major towns in the short term.

The company’s capacity has been buoyed by its partnership with LOLC Holdings the largest financial provider in Sri Lanka which has invested over US$1 million in the company. This has given Yambukai Finance leverage to increase its lending capacity to various sectors of the economy.

Since LOLC Holdings’ investment, Yambukai has seen phenomenal growth in the number of handled clients and the size of loan disbursements particularly, over the last 18 months.

LOLC has not only provided financial support to the company but technical assistance as well.

According to Yambukai, its loan offerings range from asset finance to business, salary-based and personal loans.

It also covers insurance loans and insurance premium financing where individuals are bankrolled to comprehensively cover their vehicle insurance and pay back the loan over a spread period of 12 months instead of one lump sum payment.

Although the entity’s loan book is dominated by business loans constituting circa 56 percent of their loan disbursements, it strives to incorporate the marginalised and economically active but poor segment of the local demography.

In an interview with Herald Finance and Business, Yambukai Finance managing director, Mr Eilex Muzvondiwa indicated that his company was looking at spreading across the total spectrum of Zimbabwe, from only nine branches.

“Plans are underway to set shop in Bulawayo between February and March, we intend to establish at least three branches this year some of the target areas will be Marondera, Chiredzi, Chinhoyi, Victoria Falls, we want to have footprints in all the major towns.

“Obviously to be able to do this, we need a strong capital base and this is where the involvement of LOLC comes in.

“They have stepped in in a big way to ensure that we are adequately funded,” said Mr Muzvondiwa.

He said the plan will be in tandem with the entity’s thrust of supporting Small to Medium Enterprises (SMEs) which have shown a better return on equity.

“Given our zeal for SMEs, we have set up a branch in the Kopje area of the Harare CBD because that’s where a lot of emerging businesses are found, and that branch has done very well in terms of growth along with the Chitungwiza branch.”

Yambukai Finance first engaged LOLC for partnership in 2018 but the deal did not materialise at the time but came to fruition in 2021.

Consequently, the MFI’s portfolio has immensely grown since March 2022, where it was about US$280 000 and now stands at US$3, 3 million.

Due to the investment, the size of monthly disbursements has grown from a range of US$50 000 – US$60 000 per month to US$900 000 which was recorded in November 2023.

It intends to disburse upwards of US$1,5 million per month by December this year.

“We signed an MOU in 2021 and effectively, they came on board in November 2022 as the majority shareholder with 70 percent shareholding in Yambukai, locals with 30 percent.

“They invested firstly by share purchase, whereby the existing shareholders sold a small portion. Then the majority of the investments were by way of share subscription (US$1 million), where money was put into the company and stayed in the company. In addition to that, they have since put in a significant amount by way of more loans.

“Their coming in has changed the dynamics in terms of what we are able to do in the marketplace and that has seen Yambukai grow in leaps and bounds up to where we are at the moment.

“Where we have become a market leader in the microfinance sector,” said Mr Muzvondiwa.

He said Yambukai currently has an indefinite partnership with LOLC but indicated that Zimbabwe ranks among the most profitable investments and did not see them going away anytime soon.

Yambukai was first established in 1999 and officially registered as a microfinance entity in June 2000.

It started with three shareholders, the late Kenneth Madzima, Henry Gatawa, and Eilex Muzvondiwa.

Yambukai has ridden a lot of storms, having survived the 2003-2004, the 2007-2008 hyperinflationary environments, and the 2019 environment.

Mr Muzvondiwa, however, indicated that the lending environment dimmed in the period towards 2023 plebiscite owing to lack of clarity on the tenure of the multicurrency environment.

He said the environment had since stabilised, commending the Government for stretching the multicurrency environment to 2030.

Premised on three principles of discipline, determination, and diligence the MFI has managed to keep its Non-Performing Loans (NPLs) range at around eight percent.

“We are happy with the eight percent non-performing loans range, but we still want to reduce that further, our target level is to reach an international benchmark, of about five percent.

“In other words, when you come to me and you want to borrow some money, it’s not just about that loan relationship …We do not hesitate to say no if we must say no and be rest assured, our no, as much as you may not like it, is actually good for you,” said Mr Muzvondiwa.

The company believes in customer-centricity and has custom-made products for its broad clientele.

In 2022, Yambukai won various awards at the Zimbabwe Association of Microfinance Institutions (ZAMFI) annual awards.

It walked away with coveted awards for the most productive loans, and most profitable microfinance and was runner-up in the most profitable entity.

The LOLC Group which partnered with Yambukai Finance is a diversified financial services conglomerate with a presence in 25 countries across Asia, Africa, and Australia reaching a population of over 1, 3 billion globally, catering to the needs of the underserved populations in each of its markets.

In Africa alone, they are in Zimbabwe, Kenya, Tanzania, Uganda, the Democratic Republic of Congo (DRC), Nigeria, Ghana, Egypt, and Mozambique.

LOLC is engaged in financial services, leisure, plantations, construction, mining, manufacturing and trading, digital empowerment, research and innovation, and other strategic investments.

As a committed player in the international MSME sector, the group has been a catalyst in facilitating financial inclusion.

LOLC’s ambitious global growth and expansion have been propelled by its passion for providing inclusive finance.

The group commenced operations in 1980 with ORIX Corporation of Japan and then set up a leasing company to pioneer leasing in Sri Lanka in partnership with IFC and BOC.

At the time, it was providing asset-backed financing, since it was difficult to access financing through traditional financial institutions.

LOLC grew rapidly and by early 2000 adopted an inclusive finance strategy to enhance access to its array of innovative financial products for people at the bottom of the pyramid.-herald