Access profits up 21 per cent in 2Q
Access Financial Services (AFS) reported net profits of $47.4 million for the second quarter ending June 30, 2012.
This was a 21 per cent increase over the same period last year.
Operating expenses were 59 per cent higher at $112.1 million. The cost attached to investments in the expansion of AFS's network was the reason for the increase, said Marcus James, chief executive officer.
The micro-lending agency continued investment in the expansion of its network by opening a branch on Duke Street, Kingston in March. This increased the number of branches to 14.
Invariably there was an increase in staff cost with the expansion. This expense grew by $12.1 million. The new branch has five employees.
"We increased our staff complement in the executive and operational levels," said James.
Total operating income increased by $51.7 million during the period under review, over the $107.9 million in the comparative three months last year. Movement in net reading was the main reason for the increase in income. It was up from $95.5 million for the second quarter last year to $146.9 million for this year.
For the quarter, total interest income from loans amounted to $147.2 million, up from $53.9 million compared to the same period last year. This was as a result of its efforts to increase market share in its core business of micro lending, James said.
"Given the state of the economy, we took a conservative approach in our provision standards," James said. The company tripled its allowance for credit losses during the quarter under review against the $7 million for the comparative period.
AFS introduced the Partner Plan, a micro-loan business loan product last October. It requires no collateral for and customers can borrow up to J$100,000 to finance their businesses. The micro-financing agency said that since its introduction, there has been an increase in the number of business loans and improvement in the quality of the business loan portfolio.
The principal activity of the company is retail lending to the micro-enterprise sector for personal and business purposes. Funding is provided by the financial institutions, government entities and non-governmental organisations.
Last year, it was estimated that over 3,000 new jobs were created as a result of AFS Business loan disbursements, the company said.
During 2011 the business loans disbursed by the company was over 7,000 valued at J$340.5 million to micro and small enterprises.
Over 4,000 loans where given to businesses operating in the trading sector; over 800 to the agriculture; over 200 to the manufacturing and over 1,000 to the service sector, data obtained from AFS revealed.