1

2017

COMPANY PROFILE

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

4

Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

5

Cornerstones

Registered Commercial bank

Opened October, 2011

7 branches: Cairo, Chilenje, Matero,

Kalingalinga,Chelston Garden and

Kitwe

Target group: Micro, small and

medium-sized enterprises (MSME)

Agro and low-income populations

Service offering: Fast and simple

loan application process, no prior

banking relationship required for

access to our loans, full cheque and

transfer services, free accounts, no

hidden costs, attractive interest rates

Net Loan Portfolio: ~128 mn ZMW

AB Bank Zambia is one of the rare banks that offers a full range of MSME

credit, deposit and banking products

Total Assets: ~208.7 mn ZMW

Total Deposits: ~61.9 mn ZMW

Mission:

To improve the access to a

broad range of appropriate

financial services for the

Majority of Zambian

businesses and their

owners in a sustainable and

efficient manner.

Total Accounts: ~96,343

As o

f Jan 2

017

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Shareholders and Network

An International Network Of 10 Sister Banks, Which Tend To Reach

Profitability Within 4 Years.

Our current share holders are: AccessHolding Microfinance, KfW

and the International Finance Corporation

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Board of Directors

Mathias Hoffmann Kf W nominee Holds A Masters Of Science In International Economics And Politics And AMasters Degree In International Studies And Diplomacy.

Christoph Diehl Chairman Economist; Member Of The Senior Management Of Access holding AndRegional Manager For Africa At LFS.

Armando M.Sirolla

Executive Director Extensive Microfinance Experience In Africa And Asia. Previously CEO OfPremière Agence De Microfinance AKAM) In Madagascar; Currently CEO,AB Bank Zambia.

Robin Durairajah Independent Lawyer At Chibesakunda & Co., Assisted With Creation Of Company; LocalDirector (Required By Regulation)

Chitundu NormanMwango

Access Holding Nominee

Chartered Accountant; Former Accountant General For Republic Of Zambia;Local Director (Required By Regulation) .

Martin Rohler Access Holding Nominee

Mr. Rohler Holds An M.Sc. In Agricultural Economics, And Speaks German,English, Portuguese And Spanish.

Paul Nkhoma Independent Insurance Specialist; CEO Of Hollard Insurance Zambia Limited; LocalDirector (Required By Regulation).

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Executive Management

Armando

Sirolla

(CEO)

• Joined LFS in 2013.

• Has vast experience managing micro finance projects in various countries in Sub

Saharan Africa, Madagascar and Afghanistan.

• Before this, led projects for the European Union with private sector companies in

Belgium, Portugal, and the UK.

• Holds a Master's of Science in International Economics and Politics and a Master's

degree in International Studies and Diplomacy

Nurullo

Mashrabov

(CCO)

• Nurullo Mashrabov is a senior banking adviser with more than 10 years’experience in MSME finance.

• He has been working for AB Bank Zambia since 2013 and prior to that, heworked in various Access Holding Network Banks in Tanzania, Central Asia andEastern Europe.

• Mr. Mashrabov holds a degree in Business Administration, and speaks Russian,English and Turkish.

Chilufya

Mwamba

Siansangu

(DOO)

• Has been with the bank since inception in 2011 where she started as a Client Advisor

and has progressed through various positions in the Retail department of the bank to the

top position.

• She previously worked for Building Society before joining AB Bank.

• Has an Advanced Diploma in Business and Accountancy studies and a BA in Business

Studies and Management with Leeds Metropolitan University UK.

Maximo

Mulenga

(CFO)

• Maximo has experience in public practice having worked for KPMG and Renco

Associates. Before joining the banking sector, he worked for Zambia Breweries PLC

in both Finance and internal Audit.

• Maximo is a chartered accountant and fellow of both ACCA and ZICA. He also holds

a Masters in Business Administration from Herriot-Watt University and a Diploma in

Accountancy From the Copperbelt University.

Organization and Capacity

* HR includes staff loans, Admin includes security

Audit Committee

Loans Review Committee

Risk Management Committee

Internal Audit

General Meeting of Shareholders

Board of Directors

CCO CFODOO

CEO

Financial

Reporting

Micro Loans

Head of SME

SME Loans

Credit Back

Office

HR*

Legal

IT

Admin*

Financial

Control

Treasury

Accounting

Marketing

Banking

Services

Coordinator

Banking

Services

BS Back Office

Executive Committee

Head of Micro

Core Banking

System

Customer

Service &

Complaints

Recovery Unit

Branches

Head of Agro

Agro Loans

Nomination and Remuneration

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

11

Credit Products

Accessible loans for micro-entrepreneurs and SMEs with transparent conditions

Micro-Loan SME Loan and Overdraft AGRO Loan

Purpose &

Methodology

▪ Financing Business,

mainly working capital,

expansion and Fixed

Assets

▪ Cash flow-based

appraisal, historical

financials

▪ Incorporating household

cash flow & risks

▪ Non of the purposes

prohibited in exclusion

list , no liabilities

financing

▪ Financing Business,

working capital & fixed

asset investment

▪ Cash flow-based

appraisal, incorporating

projections, benchmarks

& supplier info

▪ The same rules for Agro

SME loans

▪ Non of the purposes

prohibited in exclusion

list , no liabilities

financing

▪ Financing farming

business, working capital

& fixed asset investment

▪ Monthly Cash flow-based

appraisal, incorporating

monthly projections and

seasonality of the

farming activities

▪ Flexible repayment plans

▪ Non of the purposes

prohibited in exclusion

list , no liabilities

financing

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Credit Products

Micro-Loan SME Loan and Overdraft AGRO Loan

Products

specifications

▪ Tenor: 4 to 18 months

▪ Amount: ZMW 1,000 -

70,000

▪ Collateral: Inventory,

business equipment,

AB Term Deposits,

vehicles and household

assets. (collateral value

to cover 100% of

approved loan amount)

▪ Tenor: 4 to 36 months for

working capital, or to 60

months for fixed assets.

▪ OD tenor: up to 12 months,

▪ Amount: ZMW 70,000-

3,000,000 (up to 5% of the

bank’s core capital)▪ OD Amount: ZWM 25,000 –

1,500,000

▪ Collateral: Inventory,

machinery/business

equipment, vehicles, real

estate, TDAs. (collateral value

to cover min. 120% of approved

loan amount )

▪ Tenor: 5 to 18 months

▪ Amount: ZMW 3,000-

70,000

▪ Collateral: livestock, farm

equipment, vehicles and

household assets.

(collateral value to cover

100% of approved loan

amount )

Pricing

(Last updated

was in Sep

2016)

▪ Interest rate: ranging

from 5.75% to 7.25%

per month, declining

balance

▪ Fees: Loan

arrangement fees(5%

of loan amount)

▪ Interest rate: ranging from

3.5% to 5.5% per month,

declining balance

▪ Fees: Loan arrangement fees

(5% of loan amount)

▪ Interest rate: ranging

from 5.85% to 7.25% per

month, declining balance

▪ Fees: Loan arrangement

fees (6% of loan amount)

13→ Strong growth of business

Loan Portfolio Development

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Loan Portfolio Development

→ Strong growth of business

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Loan Portfolio Quality

→ Low-risk portfolio

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Business Loans Portfolio breakdown

Banking Services Products

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Products* Current Account Savings Account Savings Plan Term Deposits

Purpose & Accessibility

▪Full-fledged

transaction account

▪National and

international

transfers

▪Cheque service

▪USD/EUR accounts

▪No eligibility

requirements

▪Simple, easy

access account

for flexible

savings at

attractive

interest earnings

▪No eligibility

requirements

▪ Savings

account for

regular

contributions

▪ No

withdrawals

▪ Incentives

for increased

savings

▪ No eligibility

requirements

▪ Fixed-term

accounts

blocked for

withdrawal

▪ No eligibility

requirements

Pricing ▪No monthly fees

▪No minimum

balance

▪Minimal cash

withdrawal fee of

0.3%

▪6% interest p.a.

▪No monthly fees

▪No opening fees

▪No minimum

balance

▪ Interest rates

5% to 8%

▪ Minimum

balance K50

▪ No fees

▪ Interest rates

9% to 20%

▪ Minimum

balance of

K500

→ Competitive conditions on low-cost accounts

Plus account free remittances and Foreign Exchange

+ Kids Account

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Deposit Analysis

→ Financial inclusion for low-income households and MSMEs

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000Amount by Accounts Development

Term Deposits

Current

Accounts

Savings

Accounts

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Future Growth Plans

Geographical expansion in

Zambia

Overdraft product

Cash Outlets: ATMs, Agency

BankingMobile banking

Continuous growth and

process improvement

→ Serving clients in an adapted and commercially sustainable way

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

21

Balance Sheet (ZMW) 2012 2013 2014 2015

Audited Audited Audited Audited

ASSETS

CURRENT ASSETS 6,952,606 9,673,074 19,058,811 35,229,877

Cash on hand 671,374 1,930,678 2,839,997 5,759,676

Non-interest bearing deposits and clearing accounts 4,744,683 3,745,737 15,012,882 25,335,664

Interest bearing deposits and investments < 1 year 102,120 2,748,094 - 1,920,080

Prepaid expenses 728,226 752,821 525,463 826,873

Accounts receivable 234,910 106,597 108,471 407,457

Interests receivable 469,695 384,077 571,997 980,126

Other current assets 1,597 5,070 - -

NET LOAN PORTFOLIO 12,252,063 23,873,524 50,779,127 81,802,081

Gross Loan Portfolio (principal outstanding) 12,707,287 24,999,912 53,180,123 84,528,328

(Loan Loss reserves) -455,224 -1,126,388 -2,400,996 -2,726,247

LONG TERM ASSETS 13,832,162 18,000,996 17,493,222 30,812,181

Net Property and Equipment 11,006,092 15,101,277 13,803,770 18,816,115

Other long term assets 2,826,070 2,899,719 3,689,452 11,996,067

TOTAL ASSETS 33,036,830 51,547,594 87,331,160 147,844,139

LIABILITIES

CURRENT LIABILITIES 6,859,724 22,591,774 50,293,140 82,829,336

Demand deposits 3,408,273 7,664,917 9,501,228 14,079,418

Short term Time Deposits (< 1 year) 524,248 1,045,176 15,174,979 28,589,923

Short term Borrowed Funds (< 1 year) 2,297,700 8,068,940 5,588,000 0

Interests payable 118,091 655,215 1,168,912 893,794

Other short term liabilities 511,412 5,157,526 18,860,021 39,266,201

LONG TERM LIABILITIES 3,319,326 16,592,426 23,839,726 25,771,277

Long term Borrowed Funds (> 1 year) 3,319,326 16,592,426 23,839,726 25,771,277

TOTAL LIABILITIES 10,179,050 39,184,200 74,132,866 108,600,613

EQUITY

Paid-up share capital 30,000,000 30,000,000 52,000,000 104,000,000

Current year profit/loss -3,963,509 -10,494,386 -22,226,030 -28,110,583

Reserves / retained earnings / accumulated losses -3,178,712 -7,142,220 -16,575,676 -36,645,890

TOTAL EQUITY 22,857,780 12,363,394 13,198,294 39,243,526

TOTAL EQUITY AND LIABILITIES 33,036,830 51,547,594 87,331,160 147,844,139

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INCOME STATEMENT (ZMW) 2012 2013 2014 2015

Audited Audited Audited Audited

TOTAL FINANCIAL INCOME 6,274,614 11,556,509 22,102,339 36,264,844

Interest and fee income from loan portfolio 5,251,169 11,099,681 21,184,575 37,433,177

Cash Interest and fee income 4,781,474 10,715,604 20,612,578 36,453,051

Accruals ( Interest receivable) 469,695 384,077 571,997 980,126

Interest and fee income from investments 483,747 160,629 299,300 113,366

Other income from financial services 539,699 296,199 618,464 -1,281,699

TOTAL FINANCIAL EXPENSES 158,909 2,306,632 6,376,821 8,295,573

Interest and fee expense 158,909 2,306,632 6,376,821 8,295,573

for Client Deposits 22,932 105,186 499,712 1,599,526

for Borrowed Funds 135,977 2,201,446 5,877,109 6,696,047

Other financial expenses - - -

GROSS FINANCIAL MARGIN 6,115,705 9,249,877 15,725,517 27,969,271

Net loan loss provision expenses 403,830 671,164 1,282,760 1,014,388

Exchange differences: gain/(loss) 28,506 -348,877 193,580 -9,796,381

NET FINANCIAL MARGIN (after provisions) 5,740,381 8,229,837 14,636,337 17,158,502

Other operating income (non-extraordinary) 777,796 781,742 885,502 1,601,340

Operating expenses 11,761,522 19,506,531 37,747,870 50,058,312

Personnel expenses 5,616,301 10,328,309 14,008,164 20,758,988

Administrative Expenses 6,145,221 9,178,222 23,739,706 29,299,325

NET OPERATING MARGIN -5,243,345 -10,494,953 -22,226,030 -31,298,471

NET INCOME (before donations and income-taxes) -5,243,345 -10,494,953 -22,226,030 -31,298,471

Donations 1,000 - - -

Taxation on income and profits - - -3,924,536

NET INCOME -5,242,345 -10,494,953 -22,226,030 -27,373,935