GetBucks Botswana limited, a micro financing group, plans to raise P45 million on the Botswana Stock Exchange (BSE) through a second round of its P500 million medium term note programme.
The second tranche of the medium term note programme comprises of three issued notes: P15 million three year fixed rate listed note (GBL003), P25 million three year fixed rate listed note (GBL004) and P5 million one year fixed rate listed note (GBL005). The three year note will attract a fixed rate of 15 percent while the one year date note will yield 10 percent, with both interest payments paid semi-annually.
In the second round of raising capital, GetBucks is offering lower coupon rate as compared to the first trance which attracted higher returns. The lower interest rates speaks of the improved credit market and the company’s cost optimization strategy which seeks reduce the cost of funding that has been blip on the financial performance of the micro lender.
While GetBucks stock is not listed on the BSE, the financial services group’s dealings with the BSE began in late December 2016 when it issued its medium term note programme. The BSE granted GetBucks a financial instrument listing and the notes were listed on the BSE on 24 February 2017. At the time the group intended to raise between P100 and 200 million as a first tranche of the domestic medium term note.
The lender said the proceeds from the first tranche of the Note of up to P200 million will be used by GetBucks to reduce the cost of funding, decrease the exposure to foreign exchange fluctuations and expand its current service and product offering.
GetBucks managed to raise only P71.8 million through issuance of a P50 million five year fixed rate listed note (GBL001) and the P21.8 million three year fixed rate listed note (GBL002) as part of its domestic medium term note programme. The five year note pays out 18 percent and the three year fixed note attracts 15 percent, both payments are on annual basis.
All the issued notes so far are secured by its holding company, MyBucks S.A, which is Luxembourg domiciled and listed on the Frankfurt Stock Exchange. The notes issued under the Note Programme are guaranteed by MyBucks S.A. up to the value of P200 million.
GetBucks Botswana’s most recent unaudited interim results point to impressive financials on account of reduced cost of funds: There was outstanding performance in the first half of the year with the Group registering a substantial 139 percent increase in profitability, from P6.7 million to P16 million, on the back of a moderate decrease in revenue, from P41.2 million December 2016 to the current P38 million.
“The Group will continue to strive for better operating efficiencies and a reduction in its cost of funding. The loan book increased by 18 percent from 30 June 2017 and 75 percent when compared to the same earlier period,” Managing director Martin De Kock said in a statement that accompanied the financial results.
“The Group’s efficient and effective collection methods allowed it to achieve a high-quality loan book, as the Impairment-To-Loan Book Ratio decreased from 14 percent to 9 percent in a year-on-year comparison. The Cost-To-Revenue Ratio improved significantly, from 57 percent to 40 percent, on a year-on-year comparison. Total Assets increased by 75 percent when compared to the same period last year and by 26 percent since 30 June 2017, to P209.91 million.”
GetBucks Botswana, a subsidiary of MyBucks S.A. Luxemburg, is a FinTech company that embraces technology as a means to provide financial products and services to customers. GetBucks Botswana consists of three operating entities being GetBucks, TU Loans Pty Ltd and CashCorp Pty Ltd. GetBucks Botswana and TU Loans provide term loans for a period of six to sixty months and CashCorp provides short term credit of one month loans. GetBucks Botswana also provides funeral and legal cover thought its insurance agency in Botswana.