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... DFI’S INCOME DECLINES, NOW STANDS AT E52.3M

23/06/2023 05:58:00 Nhlanganiso Mkhonta

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MBABANE – The Development Finance Institutions (DFI) sector’s gross income from lending declined by 11.5 per cent on a yearly basis to E52.3 million from E58.3 million.

The decline was reportedly due to a 141.5 per cent decline in fees and commission on the loan portfolio on a yearly basis. Interest income generated from loans was the main contributor to the total gross income earned by the sector at 82 per cent. On a yearly basis, the net income from lending increased by 11.8 per cent from E21.1million to E23.9 million due to an overall decline in the impairments of loans and advances.

Financial income earned by DFIs in the quarter under review was valued at E70.2 million. This indicates a 77.3 per cent increase on a yearly basis from E15.9 million and a modest 9.0 per cent increase on a quarterly basis. Expenses incurred in lieu of the financial income equally increased on a yearly basis by 24.1 per cent from E1 million to E1.4 million. This is consistent with the commission earned based on the performance of investments.
Combined, the total income for the sector was E92.7 million as at the end of this quarter.

This indicates a 61.2 per cent increase in the value of total income on a yearly basis. The significant change on a yearly basis was due to an 84.7 per cent increase in financial income earned from investments excluding government securities and deposits held with banks and other financial institutions.

On a quarterly basis, the total income increased by 13.6 per cent due to similar reason attributed to the yearly increase. The value of loans and advances (long-term portion) was valued at E438.8 million in the quarter under review. This is a 12.0 per cent increase on a yearly basis. On a quarterly basis, the advances have increased by 8.6 per cent from E401.1 million. Further to the long-term portion of loans and advances, in the quarter under review, NIDCS was the only DFI who granted E300 000 in short term loans and advances.

As at the end of the quarter the total sectors assets DFIs were valued at E2.39 billion. This value was an increase by 0.3 per cent on a yearly basis. On a quarterly basis, the sectors assets have increased by 2.8 per cent from E2.3 2 billion. The significant portion of the assets is made up of investment in subsidiaries which account for 43 per cent of the overall assets followed by amounts owing to related parties at 21 per cent and the long-term portion of the loans and advances at 18 per cent.

The sectors liabilities were valued at E1.26 billion in the quarter under review indicating a slight decline on a yearly basis from E1.31 billion. On a quarterly basis, the liabilities declined by 5.5 per cent due to an 87.7 per cent decline in security deposits under non-current liabilities. The sectors equity position improved in the quarter under review by 5.4 per cent on a yearly basis while slightly declining on a quarterly basis by 0.2 per cent.

The DFIs market share remained relatively the same this quarter. Slight changes were noted in the market share percentage holding as NIDCS gained four per cent to increase its market share to 11 per cent as of the end of this quarter. This means IDCE lost two per cent of its market share ending the quarter with 46 per cent market share from 48 per cent recorded last quarter. FINCORP also lost two per cent market share ending the quarter with 43 per cent in market share.