Accion Microfinance Bank

“ We feel fulfilled that we were able to support and empower our clients to remain safe, provide resources for them to get back on their feet and driving digital capabilities to impact the lives, businesses and communities we serve. ”.

“ Building Resilience: Impacting Lives ”

Dear Shareholders,

The year 2020 was an unprecedented year, as the world faced the significant health, operational, and economic impacts of COVID-19. COVID-19. In February 2020, Nigeria was among the first countries in Sub-Saharan Africa to record a case of COVID-19. Unfortunately, the virus quickly spread through cities and towns. The arrival of the pandemic in Nigeria triggered policies intended to curb the spread of the virus and reduce its impact. These measures included travel limitations, restrictions on physical interactions and lockdowns. Micro and small businesses were particularly affected as these measures also limited their ability to do business, disrupted their supply chains, and all too often their own health,the health of their families and that of their customers and suppliers

I would like to commend the leadership and commitment of the management of the Bank with the support of the Board in expeditiously implementing measures to cushion the effect of this pandemic on staff, clients and other stakeholders. I have also been inspired by the resilience of our Bank and our esteemed clients during this crisis. Our staff adapted quickly to new processes designed to safeguard health and safety and look for new ways to support our clients. Our clients have rapidly moved to rebuild businesses and in some cases were able to find new opportunities amidst the pandemic.

The pandemic had an unprecedented effect on the financial performance of our Bank. As with micro entrepreneurs around the world, our clients faced sharply lower business activity, supply chain disruptions, and restrictions on movement, as well as direct health impacts.

In 2020, our Bank focused on helping our loan clients to navigate through the financial impact of the pandemic on their businesses. In recognition of the effects of the pandemic on our clients, the bank extended a grace period to 23,307 of our loan clients for a minimum of 90 days, while those in the educational sector got a grace period of at least 150 days. Additionally, the Bank waived interest for five months for our loan clients in the educational sector given the segment was particularly hard hit due to restrictions on this segment.

The number of our active borrowers decreased by 16.1%, from 53,374 in 2019 to 45,973 in 2020 and our total loan portfolio dropped by 9.75% from N10.208 billion in 2019 to N9.213 billion in 2020, as the Bank took a more cautious approach to disbursements and clients took a more cautious approach to borrowing, given the downturn in their own business activity. Total disbursements were N18.299 billion a sharp decrease of 31.85% when compared to total disbursement of N26.85 billion in 2019. Our total number of savers decreased by 10.6% to 235,407 in 2020 from 263,281 in 2019. However, customers' deposits grew to N4.309 billion in 2020 from N4.013 billion in 2019, thereby translating to a growth of 7.38%.

Our profit after tax dropped by 85.57% from N915m in 2019 to N132m in 2020, due to the relief given to our clients in 2020 through grace periods and interest reductions, as well as the lower volume of business during the year. Total equity grew from N5.246 billion in 2019 to N5.366 billion in 2020 which translates to 2.29% growth. Our Bank remains capitalized well above the N5 billion capital base required for a national microfinance bank well ahead of the April 2022 regulatory deadline.

Our service outlets remained at 93 in twelve 12 states in 2020 as we had in 2019. The Bank deemphasized our geographical spread using brick and mortar outlets and focused investments on using digital channels to drive customer acquisition and financial service delivery. Our digital migration drives the Bank's new business model, which focuses on achieving more with fewer resources. As the Bank achieves a larger digital footprint, our major touch points will include digital channels, virtual branches, and agency partnerships. We are optimistic that our strategic initiative will lead to improved efficiency in the future with positive effect on the bottom line and a better overall client experience.

I would like to express deep appreciation to all our stakeholders for their trust in Accion Microfinance Bank and immense thanks to my colleagues in the board, management and staff of Accion MfB, for their dedication, and to our customers for their loyalty and support. Thank you as well to all of the partners who believe in our vision to be the market leader in the provision of microfinance and related financial services at world-class standard. Accion Microfinance Bank Limited.

I am optimistic of the future and confident in the focused leadership of the management team, talented staff, with the support of the board to optimize the opportunities to better position your bank.

John Fischer

Chairman

Accion Microfinance Bank Limited

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