SEDPI Development Finance, Inc. (SDFI) posted an impressive 24% growth in its total assets in 2014. This is twice the growth of the banking industry that grew by 12% in the same period.
Increase in loan portfolio drove SDFI’s growth that grew from PhP160 million to PhP211 million posting a growth rate of 32%. Ninety percent of the portfolio is invested to microfinance institutions and the remaining 10% is invested to social enterprises that are into organic farming, renewable energy and alternative tourism. The portfolio growth is higher than the banking industry’s growth in their loan portfolio that grew 20% in the same period.
SDFI posted 1.4% and 5.4% return on assets and return on equity profitability ratios. The banking industry’s return on assets figure for 2014 is 1.3% while return on equity is 10.8%. SDFI is able to mimic efficiency in utilization of assets of the banking sector. In contrast, its return on equity or profits stockholders could derive is only half of the banking sector’s performance. The lower return on equity is a deliberate attempt to subdue returns to stockholders to remain true to SDFI’s social enterprise philosophy of redistribution of wealth.
(Note: Philippine banking sector figures are based on the Bangko Sentral ng Pilipinas’ report entitled “Status Report on the Philippine Banking System.” You can download the document here.)