MICROCAPITAL BRIEF: Deposit Protection Corporation Arranging Sale of MicroKing, Microfinance Subsidiary of AfrAsia Zimbabwe

The Zimbabwean Deposit Protection Corporation (DPC), recently announced that it is seeking a buyer for MicroKing Finance Limited, a microfinance subsidiary of AfrAsia Zimbabwe Holdings, which is domiciled in Mauritius. AfrAsia Holdings’ license to operate was cancelled earlier in 2015 when MicroKing “failed to meet the $25 million minimum equity capital threshold” [1]. Over the past month, six firms reportedly showed interest in MicroKing, which has been profitable. The Department for International Development (DFID), an agency of the British government, has invested USD 800,000 in MicroKing.

As of June 2014, MicroKing had USD 14 million in total assets, a gross loan portfolio of USD 11.2 million disbursed to 11,000 borrowers, return on equity (ROE) of 45.66 percent and return on assets (ROA) of 11.77 percent. MicroKing’s website is disabled, and the organization does not report deposit information to the US-based NGO Microfinance Information Exchange.

By Jeff Pierce, Research Associate

About MicroKing Finance Limited

MicroKing Finance Limited, a Zimbabwe-based microfinance company founded in 2001, is a subsidiary of AfrAsia Zimbabwe Holdings. As of June 2014, MicroKing had USD 14 million in total assets, a gross loan portfolio of USD 11.2 million disbursed to 11,000 borrowers, return on equity (ROE) of 45.66 percent and return on assets (ROA) of 11.77 percent. MicroKing’s website is disabled, and the organization does not report deposit information to the US-based NGO Microfinance Information Exchange. As of 2015 its license to operate has been revoked due to the firm’s failure to achieve USD 25 million in equity capital.

About DFID

Formed in 1997, the Department for International Development (DFID) is the department of the British government responsible for carrying out overseas development work. The main spending areas included government and civil society, health, economic growth, education, and humanitarian assistance. As of 2013, DFID reported a budget of GBP 7.9 billion (USD 13.6 billion).

Sources and Additional Resources:

[1] NewsDay Story: “DPC seeks MicroKing suitors,” https://www.newsday.co.zw/2015/05/04/dpc-seeks-microking-suitors/

[2] New Zimbabwe News: “Government to ‘bend over backwards to save MicroKing, Chinamasa,” http://www.newzimbabwe.com/business-20999-Government+to+save+MicroKing,+minister/business.aspx

[3] NewsDay Story: “DPC to secure AfrAsia Kingdom Holdings Assets,” Mtomba, Victoria, https://www.newsday.co.zw/2015/04/15/dpc-to-secure-afrasia-kingdom-holdings-assets/

MicroCapital Universe Profile: MicroKing Finance Limited

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroKing+Finance+Limited

MicroCapital Universe Profile: DFID

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Department+for+International+Development+%28DFID%29

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

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