The key to sustainable growth is not trying to do much too fast. That is the lesson that Telenor Microfinance Bank appears to have learnt the hard way, though it looks like they are learning it at long last. The year 2023 was when the bank finally turned a profit after five long years deep in red, and the year 2024 seems to be off to a flying start, suggesting that last year was not a fluke.
For the 12 months ending June 30, 2024, the latest period for which financial statements are available, the bank earned a net income of Rs2,431 million, up almost five-fold from Rs502 million for the calendar year 2023. What makes this extraordinary is the fact that the bank’s lending book is one-third smaller than it was at its peak in 2018, when its streak of losses began.
Will this return to profitability off a small balance sheet be the right approach? And will this finally result in the bank’s long-suffering shareholders making adequate returns on their investments? It is too early to answer these questions definitively, but the indications so far look encouraging. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
