An aggressive strategy to develop the untapped microfinance and microinsurance markets in Southern Africa saw Namibia-based Trustco’s after-tax profit drop to N$40-million for the year to March, compared with the prior year’s N$240-million.
Total revenue for the year amounted to N$595 239 000, compared with N$713 304 000 for the year to March 2012.
MD Quinton van Rooyen says 53 offices were opened in South Africa, which cost in the region of N$70-million, and this accounted for the drop in profits during the year.
“The setup cost, which accounted for the bulk of the losses recorded in South Africa, is a better alternative than the route of a more costly acquisition, which, in any event, had to be converted to a microfinance insurance operation at a significant cost. Microinsurance is still an unknown asset class in many parts of the world – not just Africa.”
During the last financial year, the group launched the free life insurance concept with Shoprite Namibia and rolled out a new microinsurance concept in South Africa under the Yambu trademark.
Board chairperson Advocate Raymond Heathcote says the group is growing in international stature.
“This is due to the borrowing agreements with international funders such as the German Development Bank, the French Development Bank, the International Finance Corporation and the African Development Bank. This reputational boost to the micro- finance and education segments of the group is a vote in recognition of the integrity of Trustco.
“Trustco’s listing of a R1-billion Medium Note Programme on the JSE has catapulted Trustco into an elite group of international companies which have accessed debt markets in South Africa. Trustco is the first Namibian company listed on the JSE to have achieved this milestone.”
Loans to students through the Institute of Open Learning increased from N$154-million in 2012 to N$213-million in 2013.