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Dolla pulls brake on Guyana branch but expanding in Jamaica

Microlender Dolla Financial has set aside plans for a second branch in Guyana, and instead will put more muscle behind growing the Georgetown operation launched two years ago.

CEO Kadeen Mairs made the disclosure during the company’s annual general meeting on Thursday.

“The board has taken the decision that management should focus on the Georgetown operation rather than expanding to the Berbice area, so we will continue to grow in Georgetown instead of opening a new location outside of Georgetown for the moment,” Mairs said.

The second Guyana shop was part of Dolla’s regional expansion drive being funded from the $1.5 billion raised from a bond. From that, $100 million was earmarked for the growth of Dolla Guyana’s loan book. The majority of the bond raise, $1.3 billion, kick-started Dolla Financial’s Jamaican portfolio and the remainder to its new subsidiary, Ultra Financier, which Mairs also chairs.

“Guyana is a new market. We are still learning the market, and we don’t want to get too aggressive in a market that we are new to. That’s the same sort of temperament that we will have as we look to expand into other Caribbean market,” Mairs explained.

In the meantime, Ultra Financial opened a second Jamaican branch at Fairview in Montego Bay at the end of last month.

Speaking at the parent company’s annual general meeting on Thursday, Mairs told shareholders that in just seven months of operation, Ultra Financier already accounted for about 23 per cent of Dolla’s $2.3 billion loan book.

Dolla Financial has also signed off a new partnership in Jamaica but is yet to disclose the details. It would make for the fourth arrangement this year to make loans available to customers, including one with FosRich Company Limited for the financing of solar power systems and solar water heaters for the Jamaican market.

“We signed off on a new partnership, I believe, yesterday [Wednesday], and we will make an announcement in very short order. The FosRich partnership has been going very well. We have gotten a lot of interest in the product, and we continue to process those applications,” said Chief Operating Officer Kenroy Kerr.

Since its listing on the Jamaica Stock Exchange in August 2022, Dolla Financial has been rapidly expanding its loan products in its quest for a larger slice of Jamaica’s microcredit market.

Additionally, Dolla wants to expand to Caribbean markets such as The Bahamas, St Lucia, and Barbados.

The microlender has engaged professional services to advise on the regulatory arrangements in those jurisdictions, the company had said. Mairs also said on Thursday that they were looking to enter the Dominican Republic through Ultra Financier, which targets high net worth clients and whose loan portfolio is currently valued at about $540 million, amid assets of $1.25 billion.

Dolla Financial currently has 10 branches in Jamaica and one in Georgetown, the Guyana capital.

“The strategy for Ultra is for the branches to be placed in urban areas such as Kingston and Montego Bay. Those two locations will be sufficient for the growth of Ultra in Jamaica, but outside of the country, we will focus on cities that have high net worth individuals who might need access to credit.

“Recently, our CEO, David Henriques, made a trip with a delegation to Dom Rep. That is one of the markets we are eyeing next,” Mairs said.

However, the company, which was granted its microlending licence earlier this year, says how swiftly it expands will be dependent on Bank of Jamaica’s timeline for sign-off on the plans. As new regulator of the microcredit sector, the central bank is still in the process of assessing other applicants for licensing.

In the interim, Dolla continues its hunt for more capital. It is currently wrapping up an agreement with unnamed American interests for a US$5 million loan, or around $750 million in local currency, at four per cent interest.

“We’re anticipating that the funds will be deployed somewhere between the third and fourth quarter of this year. That will take us close to September,” said Chief Financial Officer Trevene McKenzie.

As at March, Dolla’s loan portfolio was estimated at $2.3 billion, and Mairs is targeting new growth to $3 billion by the company’s financial year ending December 2023.

Mairs is also targeting revenue of $900 million for the 2023 financial year and pre-tax profit of $500 million, which would come close to doubling Dolla’s 2022 performance.

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