In 2010 International Finance Corporation (IFC) extended US$10.8 million about N$80 million to Trustco Finance as a seven year loan to enable to the company to expand its lending program to around N$430m by 2015.
Late last year the IFC team visited Namibia to carry out a due diligence for a proposed deal that is will see the company getting about N$1b to be extended to education and insurance in Namibia and abroad.
In essence the deal will involve IFC buying equity in Trustco for a certain percentage while it will also underwrite Trustco`s bond issuance in South Africa.
Getting your bonds being guaranteed by a company like IFC is something that a lot of companies dream and will never work up from that dream
How does this affect you?
Some people are wondering what this will affects them. First of all there don’t even know where brokers are, late alone Namibia Stock exchange. They have no clue of what is called equities investment. Remember Trustco is a public company where Namibians ought to know what’s happening and can earn a stake as long as they buy shares.
Trustco`s model of business is simply involved around microfinance and education, micro-insurance and technology, solutions and properties.
Trustco is one of the companies that are pushing student loans through IOL and with partners like FNB nominees and Standard Bank nominees.
The company is well positioned to serve middle to low income customers who have limited access to insurance, education and finance.
Through the involvement of IFC, Trustco is definitely going to get the required cheap money and will aggressively expand across Africa.
Limited capital in that kind of business will affect profits and dent business however, the more cash the company dish out the more the interest income and the stronger the property department and the more profitable the investment in the long-run.
Without numbers –that may be confusing to many- I recommend savvy investors to buy this share now and be associated with a company with cash and that has potential to invest the money in an investment class that will beat inflation.
NSX Share Code TUC
Cautionary date 22-Jan-13
Results Date May 2013
AGM Sept 2013
Current Price N$1.05
Market Cap $774 Mil