How confident are you about the IPO? Do you think it will attract investors given the unfavorable investment climate in the country?
We have set up 133 collection centers in 44 districts to collect share applications. We are confident that we will get overwhelming response from investors. We have four strong reasons to be confident. First, Mega´s board comprises of well-known economists, professors and others who have their own identity and expertise in this field. We have 1,219 promoters from 63 districts. Secondly, Mega´s management team is a pool of efficient banking professionals who can ensure best managerial performance. Third, our financial performance over the couple of years since its inception is impressive. Fourth, our slogan -- ´Halo to Hydro´ -- represents our inclusive nature of business.
We have introduced ´Mega IPO Savings Account´ offering 6.5 percent interest to encourage people interested to invest in Mega´s shares. We are giving 9.5 percent interest for the amount that is returned to the applicants after allotment of shares.
Photo: Republica
How do you guarantee better returns to the investors?
Though no one can provide guarantee on returns, our growing popularity, better financial performance and efficient management team are the factors that help us establish better impression among investors.
Our first dividend distribution will be big as we will share profit that we generated over the past three years. Then we will distribute dividend on the basis of yearly profit. In this way, investors also can earn attractive short term return from the investment. Even the investors who want to retain their shares will also get attractive return in the long run.
Could you please elaborate on Mega´s financial performance over the past two years?
We are really satisfied with Mega´s financial performance over these years. Our operating profit increased to Rs 71.8 million in the second year from Rs 24.3 million recorded in the first year. And, we have already earned profit of Rs 130 million until the end of third quarter of the current fiscal year.
We have succeeded in raising the number of our customers to over 100,000. Mega currently have deposits worth Rs 12.84 billion, while it has disbursed loans amounting to Rs 11.61 billion. We have a network of 28 branch offices, 45 branchless banking outlets and 31 ATM terminals across the country.
You have a very interesting slogan ´Halo to Hydro´. How successful have been in implementing your vision?
Ours has been a very unique slogan in the financial sector. This has helped us popularize our vision of inclusiveness. Our business model is shaped in the form of pyramid in which corporate sector is at the top, small and medium enterprises are at the middle and micro enterprises at the bottom as our lending sectors.
We have also been expanding branchless banking service in rural areas. We have the target of expanding this service to 45 areas by the end of this fiscal year. Mega has also set a target to increase lending to small and medium enterprises to 40 percent of the total lending. We are also promoting micro credit though its share in total lending hovers around 3 percent.
Initially, I was also not interested in expanding banking services to rural areas. But I realized later that concentrating on corporate clients along is not sufficient for complete, sustainable and successful banking. Then we started investing on SMEs and micro credit sector.
However, our effort alone is not sufficient. The government should also come up with policies that promote entrepreneurship. Entrepreneurial development will help generate employment and develop the banking sector.
What are you future plans and strategies?
Our strategy is to gradually reduce investment in corporate sector and raise investment in SMEs and micro enterprises. Banks can face huge problem if corporate houses come into crisis. Crisis in SMEs and micro firms does not affect banks much. However, it doesn´t mean that we are going to ignore corporate clients. We are also planning to add 50 more branch offices in five years.
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