The first half of 2016 posed a significant challenge for many financial institutions on the back of tightened liquidity and volatile dollar. However, good news came in the form of measures put in place by the central bank in order to avoid further volatility. Inflation appears to have peak whilst interest rates have also reached their plateau albeit driving up the cost of doing business in Zambia. Izwe’s management chose a strategy of economies of scale which has seen them create value in a sector that many feared would be hurt by regulatory measures put in place.

Their numbers show that in the first 6 months of 2016 (compared to first 6 months of 2015) they were able to increase their gross revenue by 30%. Harsh conditions in the source of capital saw their expenses and financing costs rise by 54%. However, it was not enough to hurt their bottom line as they recorded an 85.5% increase in earnings. Shareholders please smile.

It is clear from the 19% increase in operating expenses that they have a strategy to control costs in this difficult economy. Furthermore, it shows that they have the tenacity to churn out a capital structure plan that seeks out favorably priced sources of funds.  Therefore, with their scale strategy, they were able to grow their net loans and advances by 24%. Overall total asset growth stood at 15.1%. Not bad for half way through the year.


At this stage in the year, shareholders will be delighted with the 62% equity growth. However, no dividends have been declared as at publishing of the interim report. With consistency in government policies, the remainder of the year looks promising as long as fiscal parameters remain stable. Izwe intends to continue with their current scale strategy. If it works don’t change it. They have cited managing foreign currency risk and operating costs as a priority in the remaining half. All eyes will definitely be on Hon. Felix Mutati’s budget speech as it will unravel which sectors Izwe will most likely be a player financer in.

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