Bayport Financial Services is poised to fully digitalise its offerings by the end of the year, its Managing Director, Akwasi Aboagye, has disclosed.
The move, according to the Ghana Stock Exchange-listed lender, would be crowned with the introduction of a customer-initiated, ‘self-originated’ loan feature, which is consistent with the Group’s continent-wide digitalisation strategy.
Speaking when Bayport took its turn at the GSE-organised Facts behind the figures, the firm’s Chief Operating Officer, Allen Jubin stated that the full rollout is contingent on the full automation of the Third-Party Reference System (TPRS) operated by the Controller and Accountant General’s Department (CAGD).
This, he noted, is because more than 90% of Bayport’s primary product – payday loans – are extended through the CAGD. “We are just waiting on the Controller and Accountant General to fully digitise its TPRS and that is targeted at November. Once they go live, I anticipate that we would be going live with it. So, at the latest, by the end of the year,” he explained.
The Bayport Managing Director expressed optimism that the initiative would see his outfit grow its market share of CAGD-approved loans from its current position of approximately 17%. He added that the digital transition has resulted in a decrease of loan request turnaround time by some 93.75%, from 48 hours 18 months ago, to approximately three hours currently.
Mr. Aboagye credited digitalisation for the reduction in the cost-to-income ratio (CIR), which was 0.3% lower than last year at 65.4%, and argued that the same was largely responsible for the drop in CIR from 81.6% in 2019.
The credit provider recorded a 13.1% post-tax profit of GH¢ 9.5 million, with net interest income up to GH¢ 77 million for the first half of the year, up, 4.05% from the comparable period last year. Non-performing loans dropped to 8.2% for the first half of 2021. Despite this, net loans depreciated at a similar rate year-on-year, whilst impairments appreciated.
Commenting on the rise in impairments, Mr. Aboagye stated that it was as a result of the suspension of Bayport’s non-payroll product – the car title loan facility, which represents approximately 7% of its portfolio and was severely hampered by the ongoing pandemic.
He noted, however, that his outfit is embarking on an “aggressive” collection of outstanding receivables, which in this instance, are collateral-backed. “Due to a change in legislation and the effects of the pandemic, we had to reevaluate our car title loan offering. We are in the process of recovering what we have outstanding,” he said.
The MD added that Bayport has de-dollarised its balance sheet over the last 18 months, as such, it currently does have any foreign currency borrowings, which had hitherto exposed the firm to exchange rate shocks.
Mr. Aboagye stated that Bayport is optimistic that its digitalisation drive will ensure that that it is able to compete with commercial banks venturing into the payday loan segment by providing customers with speed and convenience in addition to competitive prices.
Adding her voice, Chief Financial Officer, Dzifa Cofie suggested that a combination of a de-dollarised balance sheet, an 86% rise in customer deposits; which will translate into cheaper credit, as well as an increase in digital channels, would ensure that Bayport remains competitive in the face of growing competition.