DOLLA Financial Services Limited reported a 40 per cent jump in net profit to $574.09 million in 2025, but rising loan delinquencies and $170 million in fraud-related impairments have prompted the microcredit lender to tighten its cash management strategy for 2026.

The microcredit company was able to grow its net loan book by 18 per cent to $4.73 billion with its asset base surging 13 per cent to $5.16 billion. That growth in customer demand saw the company reinvesting nearly all of its interest received and using part of its cash to fund loans.

Dolla subsequently completed a $1.5 billion public bond offering in January 2026 which will see it receive nearly $1 billion in net proceeds to support its lending business. However, Dolla Chief Executive Officer Kenroy Kerr revealed that the company will be a lot more disciplined in how funds are disbursed by the microcredit firm and its subsidiary Ultra Financier Limited.

“In 2026, we will be even more strategic and disciplined in how we grow the portfolio. So, rather than raising a billion dollars and lending it out in three months, we will just be tightening how we manage the cash that we have and get that steady incremental increase in the revenue on a quarterly basis,” said Kerr at a February 13 Mayberry Investments virtual investor briefing.

Kerr’s comments come against the backdrop of the company being impacted by fraudulent loan security documentation in 2025. The Dolla executive noted that this risk wasn’t solely isolated in real estate or motor vehicles, but fraudulent identities as well. In addition to customers falling into arrears, the company identified $170 million in fraud-related impaired loans. This pushed the company’s non-performing loan (NPL) ratio from 9.9 per cent to 13 per cent over the past year.

“We have obviously forged a closer relationship with the NLA for example where we go there to independently verify titles that we receive. We do not do disbursements until we have gotten that verification and our interest registered,” Kerr added on some of the measures introduced to mitigate the risk of fraud.

The company has restructured its collections department, sought additional guidance from Tax Administration Jamaica on motor vehicle liens, added an enhanced checklist for security documents and may require some customers to visit branches. While this is expected to add some time to the loan disbursement process, the Dolla CEO is focused on bringing down the NPL ratio and maintaining the quality of the loan book.

Dolla’s loan book is 89 per cent composed of business loans with 90 per cent of the overall loan book secured. Even with the recent passage of Hurricane Melissa, the company has identified about four per cent of its loan book being exposed to the impacted areas of Western Jamaica. He noted that the company introduced its customer assistance programme for those impacted by the storm and that it is working to liquidate properties or other assets seized during 2025 for impaired loans.

Dolla presses on expansion

Dolla is currently in a 90-day exclusivity period with Evolve Loan Co. Limited as it evaluates the prospects of acquiring its loan book. Evolve, formerly McKayla Financial Services Limited, is a subsidiary of Supreme Ventures Limited (SVL). SVL owns 15 per cent of Dolla’s issued shares.

“We are in an advanced stage in terms of evaluation and I’m sure that sometime in the near future, we’ll have some further updates for our shareholders,” Kerr added on the potential acquisition.

While the scope of Evolve Loan Co Limited’s loan portfolio is not separated in SVL’s financial statements, previous disclosures give scope to the size of the company’s business. When SVL acquired McKayla in February 2021, its loan portfolio was $198.67 million which represented 75 per cent of McKayla’s balance sheet. SVL also indicated that McKayla’s loan portfolio increased 19 per cent in Q1 2024 (January to March).

SVL’s 2024 audited financial statements revealed that the group had $825.10 million in loans and advances excluding Gamepark Limited. It was revealed in newspaper advertisement that Supreme Ventures Fintech had assigned, transferred, and conveyed all of its rights, title, benefit and interest in certain loan agreements to Evolve Loan Co in June 2025.

Dolla has grown considerably since its listing in June 2022 on the Jamaica Stock Exchange. Dolla’s consolidated asset base in December 2021 was $861.09 million with its loan portfolio at $750.50 million. This portfolio was responsible for delivering annualised total income of $395.28 million and profit before tax (PBT) of $167.80 million.

At the end of 2025, Dolla’s consolidated interest income improved 29 per cent to $1.97 billion due to its expanded loan book. Even with interest expense rising 40 per cent to $414.14 million and $87 million in expected credit losses, Dolla’s total operating income grew 29 per cent to $1.51 billion.

However, the company’s operating expenses jumped by a third from $698.94 million to $931.14 million as the microcredit firm noted the impact of fraudulent activity, expanded marketing initiatives and the wind up of its Guyanese subsidiary. This resulted in the company’s PBT rising 22 per cent to $582.13 million. Its earnings per share was $0.23.

“We don’t want to be taking on too much more debt and during 2026, I don’t believe that we have any immediate plan to take on additional debt for 2026. As such, there’s a lot of focus for us on collections and just increasing the liquidity of the company to see if we can sustain some of the growth from the cash that we collect,” Kerr added on the company’s plan for 2026.

Although Kerr didn’t delve much into Ultra Financier, he did note that the private credit subsidiary represented about a third of Dolla’s consolidated loan book. There was talk in late 2024 about the company considering an initial public offering to expand its loan book. With the Junior Market threshold now at $750 million, Ultra would have more space to raise equity at a larger valuation if it decided to go public. The higher threshold could also allow Dolla to raise up to $287.86 million in new equity to improve its debt-to-equity ratio. Dolla’s 100 per cent tax remission ends in June 2027.

Dolla’s stock price closed Monday at $2.61, which leaves it down five per cent in 2026 with a market capitalisation of $6.52 billion. Dolla will pay a $0.06 dividend totalling $150 million on April 13 to shareholders on record as of March 30. This is higher than the $0.012 dividend paid in 2025.

Mayberry Investments Vice-President Dan Theoc noted that Dolla had obtained its ISIN (International Securities Identification Number) in the week of February 13 and should be listing the two tranches of its bond on the JSE Bond Market shortly.