ubank microfinance

U Microfinance Bank’s Profit Dives 53% in 2019

U Microfinance Bank has recorded a steep decline in its profitability by 53% year-on-year in 2019.

According to the financial report, the bank made a profit of Rs. 253 million in 2019 versus a profit of Rs. 547 million in 2018.

The decline in profitability was reported due to the higher financing cost of the bank. Additionally, the decline in crop yield of sugarcane, wheat, and cotton has adversely affected the earnings and repayment capability of its borrowers mainly in the agriculture sector.

But the bank has been aggressive in its market penetration as the most active microfinance bank in the industry which scaled up its network of branches from 141 to 201 in 183 cities of the country.

It enhanced its access to the targeted borrowers as its loan portfolio increased by Rs. 23 billion with 25 percent year-on-year growth. The bank’s net assets surged to over Rs. 40 billion whereas its deposit mobilization increased to Rs. 23 billion.

U Microfinance Bank is focusing on digital loan facilitation to its customers however the present year is likely to tough for microfinance banks due to borrowers’ weak capability to pay their loans timely.

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