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 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 Zambia 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 Madagascar; 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 Tanzania, 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