Izwe Savings and Loans PLC returned to profitability in 2024, reporting a net income of GH¢443,723 after a GH¢206,440 loss the previous year, according to its audited financial statements.
The turnaround was fueled by a 42% surge in interest income to GH¢178.3 million, driven by expanded lending activities. However, rising defaults in its government payroll loan portfolio have heightened credit risks, with impaired loans exceeding 120 days jumping to GH¢100.1 million.
The Accra-based microfinance institution, licensed by Ghana’s central bank, saw total assets grow 13.6% to GH¢545.3 million, supported by a 56% increase in customer deposits to GH¢298.8 million. Executives highlighted improved liquidity, eliminating a GH¢32 million bank overdraft and generating GH¢64.7 million in operating cash flow.
Yet mounting loan losses threaten stability. Impairment provisions spiked to GH¢22.1 million, reversing a GH¢2.9 million recovery in 2023. Non-performing loans now represent 22.7% of its portfolio, up from 13.7%, linked to repayment delays from public sector workers migrating abroad. The firm holds GH¢320.4 million in collateral, primarily vehicles and property, to mitigate defaults.
Regulatory buffers remain intact, with an 11.03% capital adequacy ratio exceeding the 10% minimum. Auditors Ernst & Young issued an unmodified opinion, noting compliance with IFRS and local banking laws. Directors affirmed the company’s going concern status, citing access to credit facilities and a GH¢67.5 million equity base.
The results underscore the dual pressures facing Ghana’s non-bank financial sector: robust deposit growth amid inflationary risks and mounting defaults in a volatile economic climate.
