Dolla Financial announces exit from Guyana Loop Jamaica

The content originally appeared on: Jamaica News Loop News

Home-grown microlending firm Dolla Financial Services has announced that it is closing down its operations in Guyana, two years after setting up shop in the CARICOM market.

The company has cited geopolitical uncertainty and a reallocation of resources to Jamaica, where returns exceed those in Guyana, as the reasons behind its decision.

In an update of its latest financials, Dolla stated that its board of directors declared its intention to wind down the operations of Dolla Guyana Inc. – a wholly owned subsidiary of Dolla Financial Services Limited – in February 2024.

Dolla has been operating  Guyana’s capital, Georgetown since 2021. 

The process of shutting down the operations in Guyana will take place through the orderly run-off of the loan portfolio and is expected to be completed next year.

Dolla expects that credit disbursed in the market will be fully repaid by March, 31 2025, based on the maturity dates of the loans.

Dolla Financial, chaired by Ryan Reid, reported net income of $1.2 billion for the year ended December 2023, up 58 per cent over the previous year.

Net profit for the same period was $419 million, a 50 per cent increase over the corresponding period. Net interest income before expected credit losses stood at $1 billion, reflecting a growth of $340 million or 51 per cent year-over-year.

Dolla’s subsidiary, Ultra Financier, contributed 27 per cent to the consolidated income, showcasing the effectiveness of the subsidiary’s sales initiatives and demand for asset-based borrowing, according to the financials.

Dolla stated that these financial results underscore its commitment to financial prosperity, market expansion, and shareholder value creation.

“We remain committed to leveraging our distinctive business model, fortifying our loan portfolio, and upholding prudent risk management practices while fostering financial inclusion,” it said.

Operating expenses for the year amounted to $535 million, representing a $196 million or 58 per cent year-over-year increase.

This increase was attributed to investments in staff capacity, regulatory compliance, professional fees, and intensified marketing efforts, Dolla said.

Expected credit losses decreased from $30 million to $15 million year over year, showing a decline of 100 per cent which positively impacted both profits and the loan portfolio.

Dolla Guyana contributed $86.9 million in interest income for the year ended December 2023, up from $84.2 million. Profit from that operation for the review period was $5 million, down from $27 million in the previous year due mainly to an increase in foreign exchange losses.