Oluchi Chibuzor
Baobab Microfinance Bank Limited has revealed it has written off about N800 million for its customers in-form of interest and penalties for those that were adversely affected by the pandemic.
This is just as the bank disclosed that its share capital unimpaired loss stood at N4.7 billion as at the December 31, 2021.
Disclosing this during a chat with journalists in Lagos, recently, the Managing Director, Baobab MFB, Dr. Kazeem Olarenwaju, said the company was well positioned to meet the recapitalisation deadline despite forfeiting about N800 million in profits.
He also said more than 80 per cent of the bank’s customers are back to business because of the support from the bank.
“In this process the bank has written off about N800 million. Now we have gotten to the point of meeting our recapitalisation and you can imagine if we insist on making that money that would have added to our profit so that we can say we have hit five billion naira,” he explained.
He, however, revealed that the bank since inception has disbursed over N100 billion to over 240, 000 customers with only 23,000 accounting for less than three per cent of its loan books or Portfolio At Risk (PAR).
“As of today, we have only less than two per cent in our loan books, meaning that some of the opportunities we gave to our customers are working. Earlier, we wrote off all the penalties, parts of the interest, and in some cases we tried to enhance loans even when they have fully paid,” he said.
He added: “Everything put together so far this year tells us by projection that by the end of October, 2021, we would have hit and surpassed N5 billion.
“If in an event something that is unlikely happens, shareholders have agreed that by the end of this year if we are unable to meet the recapitalisation level by December, by January they will put in extra equity to push it to N5 billion. But I am not sure that would be necessary,” he added.
On his part, the Chief Risk Officer, Baobab MFB, Tunde Omolere, maintained that despite the fact that the bank had to write off the loan, it is not exposed to any risk.
“This year alone we have been able to recover N80 million; some of them are actually paying back now they are settled because you cannot go to another bank until you lay the last kobo,” he added.
