Money will be used to expand microfinance’s loan portfolio 

Durrant Pate/Contributor 

Micro-financier Dolla Financial Services has closed in $1.9 billion in fresh capital on the local bond market to expand the business.

The company initially targeted $1 billion in new capital through a 12% Secured Corporate Notes with Mayberry Investments Limited serving as the lead arranger and broker. The offer was later upsized to $1.9 billion in response to strong demand making the capital raise a successful one.

This latest capital raise marks a significant milestone for Dolla, reflecting the confidence of the investment community in Dolla’s vision and growth potential. The Notes carry a tenure of four years, maturing on September 30, 2028.

Dolla’s loan books improving

The net proceeds from this issuance will be utilized to strategically expand Dolla’s loan portfolio. Total loan book, net of expected credit losses (ECL) for the combined three quarters reached $3.1 billion, reflecting a year-over-year increase of $513 million (19%). 

Business loans constituted 88% of the total loan portfolio, with personal loans making up the remaining 12%. Secured loans accounted for 85% of the portfolio while unsecured loans represented 15%, highlighting Dolla’s focus on maintaining a well-balanced, risk-conscious portfolio to meet the diverse financing needs of our customers.

Interest income totalled $1.1 billion, reflecting a year-on-year increase of $206 million (23%), driven primarily by a 15% growth in sales during the first and second quarters of 2024. Net interest income before ECL reached $903 million, a $166 million (22%) year-over-year increase. 

However, this growth was moderated by a $96 million (22%) rise in operating expenses, totalling $531 million. The higher expenses stemmed from ongoing investments in staff capacity to manage increased demand, along with regulatory and professional and advisory fees and enhanced marketing initiatives.