The Institute of Private Enterprise Development (IPED) has reported a seven per cent growth in its gross loan portfolio at the end of 2018, with $3.008 billion recorded last year compared to $2.806 billion in 2017.
During 2018, IPED processed and disbursed some 4091 loans at the value of $2.663 billion compared to 4218 loans at $2.684 billion in 2017. This, according to the agency, is a decline of three per cent and one per cent in number and value respectively.
Meanwhile, the total number of loans outstanding as at December 31, 2018 decreased to 3938; that is, a three per cent decline from the 4064 loans in 2017.
IPED Chairman Komal Samaroo, addressing the Annual General Meeting (AGM) said, “IPED continues to be a pillar in the growth and development of the ordinary man and woman in their quest of owning their own businesses.”
The financial agency went on to reveal that the overall quality of the loans portfolio has recorded a marginal improvement with Portfolio at Risk (principal balance of loans in arrears for more than 30 days as percentage of gross loans) being 16.16 per cent in 2018 compared to 18.35 per cent in 2017. It added too that non-performing loans, as a percentage of gross loans, improved from 10.2 per cent in 2017 to 9.8 per cent last year.
Furthermore, IPED disclosed that data obtained from loan applications processed in 2018 indicates that micro and small businesses supported by IPED employed approximately 8627 persons.
In fact, it was noted that of the total applications processed last year, loans to female principal borrowers were 33 per cent, a decline from 35 per cent in 2017. Additionally, youth borrowers also decreased by one per cent when compared to the six per cent recorded in 2017, while borrowers without real estate collateral also took a plunge with 72 per cent last year against 76 per cent in 2017.
Nevertheless, IPED in a statement said despite challenges experience, its financial position has strengthened over the past year and continues to be stable. “The year 2018 came with its fair share of challenges but vigilance, strategic decision-making and innovation has allowed us to emerge with satisfactory results,” the financial institution stated.
To this end, IPED boasts of an eight per cent growth of its total assets, that is, $3.720 billion last year against $3.498 billion in 2017. This, it said, is financed by $3.267 billion in 2018, compared to $3.221 billion the previous year, of accumulated funds and surpluses.
Meanwhile, total liabilities increased to $454 million, representing a 63 per cent hike from $278 million at December 2017. The agency also revealed that it drew down a loan of $200 million from Demerara Bank Limited and $41 million from the Inter-American Development Bank (IDB) in 2018. These, it noted, were used to fund the growth of the loans portfolio.
In addition, IPED noted that its financial performance improved last year with a total surplus of $102.5 million, against $85.7 million in 2017, that is, an increase of $16.8 million or 19.6 per cent. The total interest income for the year was $539 million compared to $512 million in 2017, an increase of $27 million or five per cent. It added that total investment and other income was peg at $57 million at the end of 2018, compared to $55 million the previous year. This presents an increase of $2 million or four per cent; while the total expenses for 2018 were $490 million compared to $479 million in 2017, an increase of $11 million or 2.3 per cent.
On the other hand, Samaroo also announced at the AGM that founding Chairman Yesu Persaud, had retired from the board in January.
“His leadership and sterling contribution over 32 years to the development and growth of IPED, an institution focused on improving the livelihoods of micro and small business entrepreneurs, will not be forgotten,” Samaroo said of his predecessor.
IPED is a not for profit organisation but manages its financial affairs to ensure that the institution is sustainable and self-sufficient. All surpluses will be used to enhance our outreach to micro and small businesses in 2019 and thereafter.