Head of Asset Management at JN Group, Hugh Miller, says that Dolla Financial’s recent performance is just the tip of the iceberg for the newly listed company. 

The microfinancing company released its third-quarter financial report, which showed a 300% increase in net profits for the nine months that ended September 30.

The company recorded $188 million in net profits for the current financial year compared to $43 million for the same period last year. 

Speaking on Taking Stock with Kalilah Reynolds, Miller said this impressive performance was the result of several factors.

Dolla raised $500 million during its historic initial public offer, which was 10 times oversubscribed. 

Miller explained that since then, Dolla doubled its loan portfolio to $1.2 billion. 

“They made a dramatic change in their business model. Prior to COVID, most of their loans were to individuals. But post-COVID and utilising the funds from the IPO, 70% of their loans were to MSMEs (micro, small and medium-sized enterprises),” he said. 

He noted that in an industry where most loans are given to individuals, this change in business model has helped Dolla keep its non-performing loans low.

Non-performing loans are those where payments have not been made by the debtor in 90 days or more. Miller said that Dolla’s non-performing loans have remained in single digits in an industry where the average is around 15%.

He also pointed out that the company’s efficiency ratio, which is its operating cost relative to its revenue, is at 47%.  This, he said, helps the company retain its revenue. 

“Dolla pretty much hit the ball out of the park… and they are a team bounding with energy and are very aggressive with local and regional expansion,” he added. 

The company has eight branches in Jamaica and one in Guyana. It also recently announced the formation of a subsidiary called Ultra Financier Limited, which it says will provide asset-based lending to high-net-worth individuals. 

Miller also noted that with the company’s bond issue closing soon, it will have even more capital to deploy to customers. 

Dolla’s $1 billion bond was oversubscribed, and the company decided to upsize the offer to $1.5 billion. 

The JN exec said once the bond offer closes, the additional funds will give the company more room to grow its profits.

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