Net profit up 13% with an improvement in operating expense ratio

Durrant PATE/ Contributor

Access Financial Services (AFS) has returned to double growth in net profit and revenue for its 2023 financial year, which it attributes to improved market conditions.

This is in addition to the micro-financiers’ ability to improve operational efficiency. The company’s just-released audited financial statements for the year ended March 31, 2024, show it delivering a 13% increase in net profit and an improvement in its operating expense ratio from 80% to 76%. 

There was a 12% increase in revenue growth, which saw total revenues moving from $2.08 billion the previous year to $2.34 billion at the end of March 2024. The AFS Group, which includes the American wholly-owned subsidiary of Embassy Loans Inc, recorded consolidated net profit of $340 million, compared to $301 million for 2022. 

Marked increase in personal loans

Net profit margin moved to 15%, up from 14% in 2022. The personal loan portfolio ended the year on $6.04 billion, representing 92% of the gross loan portfolio, compared with $5.03 billion the year before. Business loans increased to $496 million, up from $401 million the previous year.

Total assets climbed to $7.14 billion, representing an increase of 13% compared to the $6.29 billion recorded for 2022. With almost 180 full-time employees across 17 locations across the island, AFS is one of the largest microfinance entities in Jamaica.

Chief Executive Officer, Hugh Campbell is pleased with the performance.

“Our results this year were largely driven by a strategy that prioritized efficiency and the best use of technology while ensuring that we placed focused attention on our customers. We were able to also take advantage of the increase in demand for loans, which grew our loan portfolio by 21% year over year. We increased the return on equity from 11.6% to 12.2%, ending the year with earnings per share of $1.23,” Campbell said.

This is an increase of 13%. Pointing to the company’s ongoing efforts towards greater digitisation, Campbell advises that the business leveraged internal capabilities to develop its own leads management system to track and convert leads for better sales outcomes.

Building own mobile application

 “We built our own mobile application, which is a centralised portal where we capture, organise and track leads in a tidy management system. Gone are the days when our loans officers scribble down information of possible leads. This way everyone has full visibility, including senior management to support better decision-making and action. This is just one example of how we have been using technology and it has been making a difference,” Campbell explains.

With a clear mandate from the board to drive sales, in particular, business loans, the AFS CEO advises that the team increased its marketing efforts to attract potential customers among small and medium enterprises. One successful initiative was the ‘Champion of Small Business’ campaign, which went live at the start of the financial year in April 2023. 

The campaign created much traction from which the micro-lender has been able to convert some of that to actual loans. According to Campbell, “We’ve been steadily building a reputation, as the ‘go-to’ microlender, the one that’s always in the corner of the small business owner, ready to support their everyday operations as well as their next move….”