The country’s first private sector non-bank financial institution (NBFI), IPDC Finance saw its profits surge by 25% last year, up from Tk70.6 crore in 2020 to Tk88.1 crore in 2021.
IPDC recorded growth in deposits, loans, income, and profits for the seventh consecutive year, although competing market participants struggled because of the disruptions in the business ecosystem brought on by the pandemic, data shows.
The growth of NBFIs in Bangladesh has been facing considerable deterrence since 2018’s liquidity crunch, with the sector striving for positive growth, apart from the economic fallout of the pandemic.
Despite that, according to the company’s financial report for 2021, the provision for loans and advances of IPDC Finance increased 21.9% from 2020 to 2021, accounting for Tk Tk6,533 crore.
It also registered a 15.2% rise in total deposits in 2021, amounting to Tk6,041 crore.
The credit portfolio of the company expanded by 21.9%, while revenue grew 21.7% to Tk344 crore.
IPDC’s operating costs grew 7.9% to Tk124 crore, while its classified loan ratio grew to 3.15% from 1.38% in 2020. The cost to income ratio was reduced to 36.4% from 40.7% in 2020.
The NBFI also declared 12% cash dividends for stakeholders last year.
IPDC top brass give credit for the additional growth in 2021 to its ability to adapt efficiently to the circumstances and expand into untapped markets.
“The impact of Covid-19 continued in 2021. We extended our effort for retail and small businesses i.e., SME clients. This resulted in the growth of our business,” Tareq Islam Shuvo, the head of Strategy, Brand and Corporate Communication at IPDC, told Dhaka Tribune.
Retail financing, including affordable housing loans, car loans, and consumer loans, accounted for 23% of IPDC’s total loan portfolio.
According to IPDC, overcoming scrutiny for declining profits in 2006, it took measures to centralize customer-oriented transparency in their business decisions.
This led to an exploration into the micro-small-and-medium enterprise (MSME) sector outside metropolitan areas like Dhaka and Chittagong, which led to the profits gained in 2020.
“We had decided to stay beside our customers since the very beginning of the pandemic. Not all customers had the same capacity to survive the pandemic. We focused on small businesses and stayed beside them,” said Shuvo.
“We have been recognized by the central bank for implementing the CMSME stimulus within the given time. Our growth drivers are the SMEs, who are the true growth drivers of the nation as well,” he added.
However, at the same time, due to Covid-19 related restrictions, IPDC was unable to move ahead with some of the planned expenses, like branch expansions.
“But we undertook massive digitization of our business process. As a result, our revenue increased at a much higher rate than the rise in expenses,” the IPDC official explained.
Over the last year, most of IPDC’s loan disbursement has been digitized without any increase in expenses.
However, it still is aiming for 25-30% growth and plans to add another three branches this year to have a total of 18 branches.
