ABIL(ity) to grow

Finweek English Edition - - COMPANIES & MARKETS - SI­FISO SKEN­JANA

MI­CROLEN­DER CEO Leon Kirki­nis has put pedal to the metal in get­ting African Bank In­vest­ment Limited (ABIL) back on track, hav­ing faced muted growth in sales and credit ex­ten­sion due to de­pressed con­sumers on the back of the re­cent eco­nomic cri­sis plus the com­plex re­struc­tur­ing of El­ler­ine fi­nan­cial ser­vices into an in­te­grated ABIL.

The group has em­barked on an ag­gres­sive drive to im­prove sales, credit ex­ten­sion and ad­vanced growth through a higher client base and im­proved pen­e­tra­tion/ reach, which has led to the in­tro­duc­tion of new prod­ucts to con­sumers that in­clude a “pay­ment break” prod­uct that en­ables con­sumers to ac­cess a greater amount of credit than pre­vi­ously, and pi­lot­ing a roll­out of ABIL-branded ATMs – the first be­ing in­stalled in Septem­ber 2010.

Adding a sweet touch to the ABIL in­vest­ment case is the re­cently acquired El­ler­ine, whose earn­ings were up 35% for the 12 months to Septem­ber 2010. Lo­cal re­tail (the sec­tor in which El­ler­ine pri­mar­ily op­er­ates) sales growth fig­ures have in­creased at 6,1%, con­firm­ing con­sumer spend­ing is re­viv­ing. Spe­cific to the El­ler­ine prod­uct and ser­vice of­fer­ing, do­mes­tic house­hold and fur­ni­ture and ap­pli­ance sales growth came out at a stel­lar 17,1% in De­cem­ber. That – along­side the com­pany’s in­ten­tions to dou­ble sales in 2011 through re­duced prices, cost of credit and in­surance from high El­ler­ine lev­els – will en­sure they grow the size of their mar­ket share and the scale of their credit mar­kets.

An­a­lysts say re­cent con­sumer spend­ing (a big driver of the econ­omy) fig­ures are good enough to con­vince the SA Re­serve Bank to keep rates un­changed when com­mit­tee mem­bers re­con­vene later this month. The low in­fla­tion and in­ter­est en­vi­ron­ment, cou­pled with above-in­fla­tion salary in­creases, po­si­tions ABIL well to ben­e­fit from the re­sul­tant in­crease in dis­pos­able in­come.

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