COMPANY PROFILE 2017

1 Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

2 Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

3 Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

4

Cornerstones As of Jan 2017 Jan of As Registered Commercial bank Net Loan Portfolio: ~128 mn ZMW

Opened October, 2011 Total Assets: ~208.7 mn ZMW Total Deposits: ~61.9 mn ZMW 7 branches: Cairo, Chilenje, Matero, Kalingalinga,Chelston Garden and Total Accounts: ~96,343 Kitwe

Target group: Micro, small and medium-sized enterprises (MSME) Mission: Agro and low-income populations To improve the access to a broad range of appropriate Service offering: Fast and simple financial services for the loan application process, no prior Majority of Zambian banking relationship required for businesses and their access to our loans, full cheque and owners in a sustainable and transfer services, free accounts, no efficient manner. hidden costs, attractive interest rates

AB Bank is one of the rare banks that offers a full range of MSME5 credit, deposit and banking products Shareholders and Network

Our current share holders are: AccessHolding Microfinance, KfW and the International Finance Corporation

An International Network Of 10 Sister Banks, Which Tend To Reach Profitability Within 4 Years. 6 Board of Directors

Christoph Diehl Chairman Economist; Member Of The Senior Management Of Access holding And Regional Manager For Africa At LFS.

Armando M. Executive Director Extensive Microfinance Experience In Africa And Asia. Previously CEO Of Sirolla Première Agence De Microfinance AKAM) In ; Currently CEO, AB Bank Zambia.

Robin Durairajah Independent Lawyer At Chibesakunda & Co., Assisted With Creation Of Company; Local Director (Required By Regulation)

Chitundu Norman Access Holding Chartered Accountant; Former Accountant General For Republic Of Zambia; Mwango Nominee Local Director (Required By Regulation) .

Martin Rohler Access Holding Mr. Rohler Holds An M.Sc. In Agricultural Economics, And Speaks German, Nominee English, Portuguese And Spanish.

Paul Nkhoma Independent Insurance Specialist; CEO Of Hollard Insurance Zambia Limited; Local Director (Required By Regulation).

Mathias Hoffmann Kf W nominee Holds A Masters Of Science In International Economics And Politics And A Masters Degree In International Studies And Diplomacy.

7 Executive Management Armando • Joined LFS in 2013. Sirolla • Has vast experience managing micro finance projects in various countries in Sub Saharan Africa, Madagascar and Afghanistan. (CEO) • Before this, led projects for the European Union with private sector companies in Belgium, Portugal, and the UK. • Holds a Master's of Science in International Economics and Politics and a Master's degree in International Studies and Diplomacy Nurullo • Nurullo Mashrabov is a senior banking adviser with more than 10 years’ Mashrabov experience in MSME finance. • He has been working for AB Bank Zambia since 2013 and prior to that, he (CCO) worked in various Access Holding Network Banks in , Central Asia and Eastern Europe. • Mr. Mashrabov holds a degree in Business Administration, and speaks Russian, English and Turkish. Chilufya • Has been with the bank since inception in 2011 where she started as a Client Advisor Mwamba and has progressed through various positions in the Retail department of the bank to the Siansangu top position. • She previously worked for Building Society before joining AB Bank. (DOO) • Has an Advanced Diploma in Business and Accountancy studies and a BA in Business Studies and Management with Leeds Metropolitan University UK.

Maximo • Maximo has experience in public practice having worked for KPMG and Renco Mulenga Associates. Before joining the banking sector, he worked for Zambia Breweries PLC in both Finance and internal Audit. (CFO) • Maximo is a chartered accountant and fellow of both ACCA and ZICA. He also holds8 a Masters in Business Administration from Herriot-Watt University and a Diploma in Accountancy From the Copperbelt University. Organization and Capacity

General Meeting of Shareholders Audit Committee

Loans Review Committee Board of Directors Risk Management Committee

Nomination and Remuneration

Executive Committee CEO Internal Audit

CCO DOO CFO

Branches

Head of Micro Banking Services HR* Accounting Coordinator Micro Loans Admin* Treasury Head of SME Banking Services IT Financial SME Loans BS Back Office Control Head of Agro Legal Core Banking Financial Agro Loans System Reporting

Customer Credit Back Service & Office Complaints

Recovery Unit Marketing * HR includes staff loans, Admin includes security Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

10 Credit Products

Accessible loans for micro-entrepreneurs and SMEs with transparent conditions

Micro-Loan SME Loan and Overdraft AGRO Loan

Purpose & ▪ Financing Business, ▪ Financing Business, ▪ Financing farming Methodology mainly working capital, working capital & fixed business, working capital expansion and Fixed asset investment & fixed asset investment Assets ▪ Cash flow-based ▪ Monthly Cash flow-based ▪ Cash flow-based appraisal, incorporating appraisal, incorporating appraisal, historical projections, benchmarks monthly projections and financials & supplier info seasonality of the ▪ Incorporating household ▪ The same rules for Agro farming activities cash flow & risks SME loans ▪ Flexible repayment plans ▪ Non of the purposes ▪ Non of the purposes ▪ Non of the purposes prohibited in exclusion prohibited in exclusion prohibited in exclusion list , no liabilities list , no liabilities list , no liabilities financing financing financing

11 Credit Products Micro-Loan SME Loan and Overdraft AGRO Loan Products ▪ Tenor: 4 to 18 months ▪ Tenor: 4 to 36 months for ▪ Tenor: 5 to 18 months specifications ▪ Amount: ZMW 1,000 - working capital, or to 60 ▪ Amount: ZMW 3,000- 70,000 months for fixed assets. 70,000 ▪ Collateral: Inventory, ▪ OD tenor: up to 12 months, ▪ Collateral: livestock, farm business equipment, ▪ Amount: ZMW 70,000- equipment, vehicles and AB Term Deposits, 3,000,000 (up to 5% of the household assets. vehicles and household bank’s core capital) (collateral value to cover assets. (collateral value ▪ OD Amount: ZWM 25,000 – 100% of approved loan to cover 100% of 1,500,000 amount ) approved loan amount) ▪ Collateral: Inventory, machinery/business equipment, vehicles, real estate, TDAs. (collateral value to cover min. 120% of approved loan amount )

Pricing ▪ Interest rate: ranging ▪ Interest rate: ranging from ▪ Interest rate: ranging (Last updated from 5.75% to 7.25% 3.5% to 5.5% per month, from 5.85% to 7.25% per was in Sep per month, declining declining balance month, declining balance 2016) balance ▪ Fees: Loan arrangement fees ▪ Fees: Loan arrangement ▪ Fees: Loan (5% of loan amount) fees (6% of loan amount) arrangement fees(5% of loan amount) 12 Loan Portfolio Development

→ Strong growth of business 13 Loan Portfolio Development

→ Strong growth of business 14 Loan Portfolio Quality

→ Low-risk portfolio 15 Business Loans Portfolio breakdown

16 Banking Services Products

Products* Current Account Savings Account Savings Plan Term Deposits Purpose & ▪ Full-fledged ▪ Simple, easy ▪ Savings ▪ Fixed-term Accessibility transaction account access account account for accounts ▪ National and for flexible regular blocked for international savings at contributions withdrawal transfers attractive ▪ No ▪ No eligibility ▪ Cheque service interest earnings withdrawals requirements ▪ USD/EUR accounts ▪ No eligibility ▪ Incentives ▪ No eligibility requirements for increased requirements savings + Kids ▪ No eligibility Account requirements

Pricing ▪ No monthly fees ▪ 6% interest p.a. ▪ Interest rates ▪ Interest rates ▪ No minimum ▪ No monthly fees 5% to 8% 9% to 20% balance ▪ No opening fees ▪ Minimum ▪ Minimum ▪ Minimal cash ▪ No minimum balance K50 balance of withdrawal fee of balance ▪ No fees K500 0.3% Plus account free remittances and Foreign Exchange 17 → Competitive conditions on low-cost accounts Deposit Analysis

Amount by Accounts Development 70,000,000 Term Deposits 60,000,000 50,000,000 40,000,000 Current Accounts 30,000,000 20,000,000 Savings 10,000,000 Accounts 0

18 → Financial inclusion for low-income households and MSMEs Future Growth Plans

Geographical expansion in Zambia

Continuous growth and Overdraft process product improvement

Cash Outlets: Mobile banking ATMs, Agency Banking

→ Serving clients in an adapted and commercially sustainable way 19 Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

20 Balance Sheet (ZMW) 2012 2013 2014 2015 Audited Audited Audited Audited ASSETS CURRENT ASSETS 6,952,606 9,673,074 19,058,811 35,229,877 Cash on hand 671,374 1,930,678 2,839,997 5,759,676 Non-interest bearing deposits and clearing accounts 4,744,683 3,745,737 15,012,882 25,335,664 Interest bearing deposits and investments < 1 year 102,120 2,748,094 - 1,920,080 Prepaid expenses 728,226 752,821 525,463 826,873 Accounts receivable 234,910 106,597 108,471 407,457 Interests receivable 469,695 384,077 571,997 980,126 Other current assets 1,597 5,070 -- NET LOAN PORTFOLIO 12,252,063 23,873,524 50,779,127 81,802,081 Gross Loan Portfolio (principal outstanding) 12,707,287 24,999,912 53,180,123 84,528,328 (Loan Loss reserves) -455,224 -1,126,388 -2,400,996 -2,726,247 LONG TERM ASSETS 13,832,162 18,000,996 17,493,222 30,812,181 Net Property and Equipment 11,006,092 15,101,277 13,803,770 18,816,115 Other long term assets 2,826,070 2,899,719 3,689,452 11,996,067 TOTAL ASSETS 33,036,830 51,547,594 87,331,160 147,844,139 LIABILITIES CURRENT LIABILITIES 6,859,724 22,591,774 50,293,140 82,829,336 Demand deposits 3,408,273 7,664,917 9,501,228 14,079,418 Short term Time Deposits (< 1 year) 524,248 1,045,176 15,174,979 28,589,923 Short term Borrowed Funds (< 1 year) 2,297,700 8,068,940 5,588,000 0 Interests payable 118,091 655,215 1,168,912 893,794 Other short term liabilities 511,412 5,157,526 18,860,021 39,266,201 LONG TERM LIABILITIES 3,319,326 16,592,426 23,839,726 25,771,277 Long term Borrowed Funds (> 1 year) 3,319,326 16,592,426 23,839,726 25,771,277 TOTAL LIABILITIES 10,179,050 39,184,200 74,132,866 108,600,613 EQUITY Paid-up share capital 30,000,000 30,000,000 52,000,000 104,000,000 Current year profit/loss -3,963,509 -10,494,386 -22,226,030 -28,110,583 Reserves / retained earnings / accumulated losses -3,178,712 -7,142,220 -16,575,676 -36,645,890 TOTAL EQUITY 22,857,780 12,363,394 13,198,294 39,243,526 TOTAL EQUITY AND LIABILITIES 33,036,830 51,547,594 87,331,160 147,844,13921 INCOME STATEMENT (ZMW) 2012 2013 2014 2015 Audited Audited Audited Audited TOTAL FINANCIAL INCOME 6,274,614 11,556,509 22,102,339 36,264,844 Interest and fee income from loan portfolio 5,251,169 11,099,681 21,184,575 37,433,177 Cash Interest and fee income 4,781,474 10,715,604 20,612,578 36,453,051 Accruals ( Interest receivable) 469,695 384,077 571,997 980,126 Interest and fee income from investments 483,747 160,629 299,300 113,366 Other income from financial services 539,699 296,199 618,464 -1,281,699 TOTAL FINANCIAL EXPENSES 158,909 2,306,632 6,376,821 8,295,573 Interest and fee expense 158,909 2,306,632 6,376,821 8,295,573 for Client Deposits 22,932 105,186 499,712 1,599,526 for Borrowed Funds 135,977 2,201,446 5,877,109 6,696,047 Other financial expenses --- GROSS FINANCIAL MARGIN 6,115,705 9,249,877 15,725,517 27,969,271 Net loan loss provision expenses 403,830 671,164 1,282,760 1,014,388

Exchange differences: gain/(loss) 28,506 -348,877 193,580 -9,796,381

NET FINANCIAL MARGIN (after provisions) 5,740,381 8,229,837 14,636,337 17,158,502

Other operating income (non-extraordinary) 777,796 781,742 885,502 1,601,340 Operating expenses 11,761,522 19,506,531 37,747,870 50,058,312 Personnel expenses 5,616,301 10,328,309 14,008,164 20,758,988 Administrative Expenses 6,145,221 9,178,222 23,739,706 29,299,325 NET OPERATING MARGIN -5,243,345 -10,494,953 -22,226,030 -31,298,471 NET INCOME (before donations and income-taxes) -5,243,345 -10,494,953 -22,226,030 -31,298,471 Donations 1,000 --- Taxation on income and profits - - -3,924,536 NET INCOME -5,242,345 -10,494,953 -22,226,030 -27,373,935 22