Microlender ISP Finance is targeting loan book growth this year after seeing no significant growth volume in its operations over at least three years.

The company, in its just-released 2022 annual report, said that while it wants to continue to make strides in offering loan products to satisfy clients’ needs, particularly in household expenditure, education, and health, it was eyeing new loan areas to expand its offerings over the short term. Moreover, it has embarked on a strategy to target new markets using an aggressive pricing strategy to grow loan volumes.

“We are looking at doing more bridge loans or short-term loans. The construction industry has been booming, not to say that it’s the only segment we are looking at, but we like bridge loans and so we are doing more of that,” CEO of ISP Finance Dennis Smith told the
Jamaica Observer.

ISP year-end results are not yet out, but for the third quarter ending September 2023, interest income earned from loans rose 26 per cent year on year to $137 million. The company also produced growth of 12 per cent for the nine-month period when compared to the similar period of 2022.

A breakdown of ISP’s 2022 audited results shows that the company began revising how it disburses loans during that year. Its dealings in agriculture business loans have plummeted, moving from $8 million in disbursements over the 2021 financial year to just a little over $1.3 million in 2022.

The amount it disburses under the category ‘services’ has also been cut in half at $24 million as at year-end 2022, but it has been pushing more cash under the segment ‘trading’, which swelled to $30 million compared to $18 million for the prior year.

Meanwhile, disbursements under loan segment ‘personal’ and ‘manufacturing business loans’ have stayed steady year on year.

“The agriculture sector is too risky, too dependent on too many factors. We are doing bridge loans because that way we don’t have to take on the risks,” Smith said.

Overall, ISP has reported loan book growth of 41 per cent as at September 2023, a performance that lifted the company to $959 million. Despite improved performance on loans, profit for ISP was marginally down for the September quarter at $22.5 million compared to $23.2 million for the prior year.

The company has also utilised $200 million it had in investments. The money is part of the $470 million ISP raised in 2022, part of which the company said was to be used to pay down debt and the remainder — $200 million — was set aside for the acquisition of a loan portfolio. ISP has been making acquisition talks from as far back as 2020, but Smith says the negotiations continue.

“I can’t speak much on the acquisition target right now,” he said.

So far, ISP Finance has only announced that a loan book acquisition deal struck in 2020 gives it the right to purchase select existing loans from what its management described as a medium-sized loan portfolio.