Just months after announcing that it was looking for companies to add to its microfinance business, ISP Finance Services says it has struck a deal to acquire a loan portfolio.
The agreement is subject to closing conditions that determine the overall scope of the acquisition. Management expects the closing to occur before the end of the year and the transaction will benefit the growth of the loan book immediately.
ISP Finance typically lends to individuals seeking financial help with household expenses, education, and health issues.
Many players in the microfinance sector are affected by the COVID-19 pandemic. Some also had to adjust their businesses due to the passage of the MicroCredit Act, which for the first time puts the Bank of Jamaica in charge of lenders.
The impact in the industry has led to the Jamaica Micro Financing Association (JamFA) and the Jamaica Association for Micro Financing (JamFin) – the associations that speak for payday lenders and reiterate their message that some members – especially smaller players – may need to merge to survive .
Others are looking for growth opportunities.
Despite the negative business impact, ISP Finance saw a modest improvement in net income to $ 32 million in the six months ended June 2021. The growth was due to a 15 percent increase in interest income to $ 204 billion.
In its statement released earlier this week on JSE, ISP Finance said the loan purchase agreement gives the company the right to select existing loans from a medium-sized loan portfolio.
ISP Finance was listed on the Jamaica Stock Exchange five years ago. The company has expanded its business mainly through new product offerings and its network of branches across the island.