VFD Microfinance Bank’s Journey to Recovery: Navigating Economic Headwinds and Embracing Digital Transformation
VFD Microfinance Bank, a digitally driven financial institution, has demonstrated resilience and adaptability in navigating the challenging economic landscape of the past two financial years. After experiencing a setback in 2023, marked by a significant loss, the bank has successfully rebounded in 2024, achieving a remarkable turnaround and returning to profitability. This achievement underscores the bank’s commitment to its strategic objectives, which center on leveraging technology to drive financial inclusion and deliver sustainable value to its stakeholders.
The year 2023 presented numerous macroeconomic challenges for the financial services sector, including high inflation, currency depreciation, and sluggish GDP growth. These factors significantly impacted VFD Microfinance Bank’s performance, resulting in a loss of N333.3 million. However, this period served as a crucial inflection point, prompting the bank to implement strategic adjustments and operational improvements that paved the way for its subsequent recovery.
The bank’s leadership acknowledged the difficulties faced in 2023, emphasizing that the loss reflected both external constraints and internal adjustments. The Board Chairman, Collins Chikeluba, highlighted the unprecedented macroeconomic and operational challenges encountered during the year. However, he also emphasized the positive turnaround achieved in 2024, marked by significant revenue growth and a return to profitability. This shift in performance signifies the effectiveness of the strategic adjustments implemented by the bank.
The Managing Director/Chief Executive Officer, Rotimi Awofisibe, echoed this sentiment, describing 2023 as a testing period that sharpened the bank’s strategic clarity and operational discipline. Despite the recorded loss, decisive steps were taken to reposition the bank, and the positive results achieved in 2024, including a 39.8% revenue growth and a profit of N366.6 million, validate the effectiveness of these actions. The bank remains focused on enhancing its digital footprint, expanding its customer base, and maintaining financial discipline to deliver long-term value to all stakeholders.
The bank’s 2024 audited financial results demonstrate a remarkable recovery. Revenue grew by 39.8%, increasing from N3.2 billion in 2023 to N4.5 billion in 2024. This growth, coupled with operational efficiencies and cost optimization measures, contributed to the bank’s return to profitability, with a profit after tax of N366.6 million. These figures underscore the effectiveness of the bank’s strategic adjustments and its commitment to achieving sustainable growth.
VFD Microfinance Bank remains committed to its core strategic objectives of driving financial inclusion through digital innovation, providing tailored solutions for small and medium-sized enterprises (SMEs), and enhancing customer engagement. At its third Annual General Meeting, held under the theme "Banking with Purpose, Delivering with Impact," the bank reiterated its commitment to these objectives. The bank also highlighted its strengthened risk management framework and strategic partnerships, which are essential for expanding its reach and improving service delivery. The Chief Operating Officer, Theodore Asamoah, praised the team’s efforts in optimizing operations and enhancing efficiency, which contributed significantly to the revenue growth and return to profitability in 2024. The bank’s focus on leveraging technology and innovation remains central to its strategy for improving service delivery and expanding its reach. While no dividend was declared for the period under review, the bank expresses optimism about its prospects for future profitability and sustained value creation. This positive outlook reflects the bank’s confidence in its strategic direction and its ability to navigate the evolving financial landscape.
