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2016COMPANY PROFILE

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Cornerstones

Registered Commercial bank

Opened October 2011

7 branches: Cairo, Chilenje, Matero, Kalingalinga, Chelston Garden and Kitwe

Target group: Micro, small and medium-sized enterprises (MSME) Agro and low-income populations

Service offering: Fast and simple loan application process, no prior banking relationship required for access to our loans, full cheque and transfer services, free accounts, no hidden costs, attractive interest rates

Net Loan Portfolio: ~84.9 mn ZMW

AB Bank Zambia is one of the rare banks that offers a full range of MSME

credit, deposit and banking products

Total Assets: ~149.7 mn ZMW

Total Deposits: ~44.2 mn ZMW

Mission:To improve the access to a broad range of appropriate financial services for the

Majority of Zambian businesses and their

owners in a sustainable and efficient manner.

Mission:To improve the access to a broad range of appropriate financial services for the

Majority of Zambian businesses and their

owners in a sustainable and efficient manner.

Total Accounts: ~71,927

As of Ja n 2016

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Shareholders and Network

An International Network Of 10 Sister Banks, Which Tend To Reach Profitability Within 4 Years.

Our Current Share Holders Include KfW (World Bank Group), The International Finance Corporation, The Dutch Development Finance Institution FMO, And The Belgium-based Impulse Microfinance Fund.

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Board of Directors

Mathias Hoffmann Kf W Holds A Masters Of Science In International Economics And Politics And A Masters Degree In International Studies And Diplomacy.

Christoph Diehl

Access Holding nominee

Economist; Member Of The Senior Management Of Access holding And Regional Manager For Africa At LFS.

Armando M.Sirolla

Executive Director Extensive Microfinance Experience In Africa And Asia. Previously CEO Of Première Agence De Microfinance AKAM) In Madagascar; Currently CEO, AB Bank Zambia.

Dominiek Deconinck Incofin nominee Investment Banker; Director Of Private Equity At Incofin. Has Served As Non-executive Director On 5 Boards

Robin Durairajah Independent Lawyer At Chibesakunda & Co., Assisted With Creation Of Company; Local Director (Required By Regulation)

Chitundu Norman Mwango

Access Holding Nominee

Chartered Accountant; Former Accountant General For Republic Of Zambia; Local Director (Required By Regulation) .

Martin Rohler Access Holding Nominee

Mr. Rohler Holds An M.Sc. In Agricultural Economics, And Speaks German, English, Portuguese And Spanish.

Paul Nkhoma Independent Insurance Specialist; CEO Of Hollard Insurance Zambia Limited; Local Director (Required By Regulation).

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Executive Management

Armando Sirolla

(CEO)

• Joined LFS in 2013.• Has vast experience managing micro finance projects in various countries in Sub

Saharan Africa, Madagascar and Afghanistan.• Before this, led projects for the European Union with private sector companies in

Belgium, Portugal, and the UK.• Holds a Master's of Science in International Economics and Politics and a Master's

degree in International Studies and Diplomacy

Byamba-OchirNyamsuren

(CCO)

• Joined LFS in 2008• Seconded to AB Bank Zambia since its pilot phase in 2011, and has held various

positions such as Head of Micro, Branch Coordinator and Branch Manager, and prior to assignment in Zambia, he worked with Access Bank Tanzania and AB Bank Nigeria as Credit and Banking Advisor;

• Has a BBM majored in International Trade and Business;

Chilufya Mwamba

Siansangu

(DOO)

• Has been with the bank since inception in 2011 where she started as a Client Advisor and has progressed through various positions in the Retail department of the bank to the top position. • She previously worked for Building Society before joining AB Bank.• Has an Advanced Diploma in Business and Accountancy studies and a BA in Business Studies and Management with Leeds Metropolitan University UK.

Maximo Mulenga

(CFO)

• Maximo has experience in public practice having worked for KPMG and Renco Associates. Before joining the banking sector, he worked for Zambia Breweries PLC in both Finance and internal Audit.

• Maximo is a chartered accountant and fellow of both ACCA and ZICA. He also holds a Masters in Business Administration from Herriot-Watt University and a Diploma in Accountancy From the Copperbelt University.

Organization and Capacity

* HR includes staff loans, Admin includes security

Audit Committee

Loans Review Committee

Risk Management Committee

Internal Audit

General Meeting of Shareholders

Board of Directors

CCOCCO CFOCFOCOO/Deputy CEOCOO/Deputy CEO

CEOCEO

Financial Reporting

Micro Loans

Head of SME

SME Loans

Credit Back Office

HR*

Legal

IT

Admin*

Financial Control

Treasury

Accounting

Marketing

Banking Services

Coordinator

Banking Services

BS Back Office

Executive Committee

Head of Micro

Core Banking System

Customer Service &

Complaints

Recovery Unit

Branches

Head of AgroHead of Agro

Agro Loans

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Credit Products

Accessible loans for micro-entrepreneurs and SMEs with transparent conditions

Micro-Loan SME Loan AGRO Loan

Purpose & Methodology

Business, mainly working capital expansion and Fixed Assets

Cash flow-based appraisal, historical financials

Incorporating household cash flow & risks

Business, working capital & fixed asset investment

Cash flow-based appraisal, incorporating projections, benchmarks & supplier info

Business, working capital & fixed asset investment

Monthly Cash flow-based appraisal, incorporating monthly projections and seasonality of the farming activities

Key Terms Tenor: Up to 18 months, Amount: ZMW 1,000-70,000

Collateral: Inventory, business equipment, AB Term Deposits, vehicles and household assets

Tenor: Up to 36 months, Amount: ZMW 70,000-1,500,000

Collateral: Inventory, machinery/business equipment, vehicles, real estate

Tenor: 5 to 12 months, typically 6-11 months

Amount: ZMW 3,000-50,000

Collateral: livestock, farm equipment, vehicles and household assets

Pricing Average Interest rate: 5.6% per month, declining balance

Fees: Loan arrangement fee (5% of loan amount)

Interest rate: ranging from 3% to 5% per month, declining balance

Fees: Loan arrangement fee (4 % of loan amount)

Interest rate: 5.8% per month, declining balance

Fees: Loan arrangement fee (3% of loan amount)

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Loan Portfolio Development

Strong growth of business

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Loan Portfolio Development

Strong growth of business

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Loan Portfolio Quality

Low-risk portfolio

Banking Services Products

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Products* Current Account Savings Account Savings Plan Term Deposits

Purpose & Accessibility

Full-fledged transaction account

National and international transfers

Cheque service USD/EUR accounts No eligibility

requirements

Simple, easy access account for flexible savings at attractive interest earnings

No eligibility requirements

Savings account for regular contributions

No withdrawals

Incentives for increased savings

No eligibility requirements

Fixed-term accounts blocked for withdrawal

No eligibility requirements

Pricing No monthly fees No minimum

balance Minimal cash

withdrawal fee of 0.2%

6% interest p.a.No monthly feesNo opening feesNo minimum

balance

Interest rates 5% to 8%

Minimum balance K50

No fees

Interest rates 9% to 20%

Minimum balance of K500

Competitive conditions on low-cost accounts

Plus account free remittances and Foreign Exchange

+ Kids Account

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Deposit Analysis

Financial inclusion for low-income households and MSMEs

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Future Growth Plans

Serving clients in an adapted and commercially sustainable way

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Contents

1. Cornerstones

2. Key Stakeholders

3. Business

4. Financial Data

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Balance Sheet (ZMW) 2012 2013 2014 2015Audited Audited Audited Audited

ASSETS CURRENT ASSETS 6,952,606 9,673,074 19,058,811 35,229,877 Cash on hand 671,374 1,930,678 2,839,997 5,759,676

Non-interest bearing deposits and clearing accounts 4,744,683 3,745,737 15,012,882 25,335,664 Interest bearing deposits and investments < 1 year 102,120 2,748,094 - 1,920,080 Prepaid expenses 728,226 752,821 525,463 826,873 Accounts receivable 234,910 106,597 108,471 407,457 Interests receivable 469,695 384,077 571,997 980,126 Other current assets 1,597 5,070 - -NET LOAN PORTFOLIO 12,252,063 23,873,524 50,779,127 81,802,081 Gross Loan Portfolio (principal outstanding) 12,707,287 24,999,912 53,180,123 84,528,328 (Loan Loss reserves) -455,224 -1,126,388 -2,400,996 -2,726,247 LONG TERM ASSETS 13,832,162 18,000,996 17,493,222 30,812,181 Net Property and Equipment 11,006,092 15,101,277 13,803,770 18,816,115 Other long term assets 2,826,070 2,899,719 3,689,452 11,996,067 TOTAL ASSETS 33,036,830 51,547,594 87,331,160 147,844,139 LIABILITIES CURRENT LIABILITIES 6,859,724 22,591,774 50,293,140 82,829,336 Demand deposits 3,408,273 7,664,917 9,501,228 14,079,418 Short term Time Deposits (< 1 year) 524,248 1,045,176 15,174,979 28,589,923 Short term Borrowed Funds (< 1 year) 2,297,700 8,068,940 5,588,000 0 Interests payable 118,091 655,215 1,168,912 893,794 Other short term liabilities 511,412 5,157,526 18,860,021 39,266,201 LONG TERM LIABILITIES 3,319,326 16,592,426 23,839,726 25,771,277 Long term Borrowed Funds (> 1 year) 3,319,326 16,592,426 23,839,726 25,771,277 TOTAL LIABILITIES 10,179,050 39,184,200 74,132,866 108,600,613 EQUITY Paid-up share capital 30,000,000 30,000,000 52,000,000 104,000,000 Current year profit/loss -3,963,509 -10,494,386 -22,226,030 -28,110,583Reserves / retained earnings / accumulated losses -3,178,712 -7,142,220 -16,575,676 -36,645,890TOTAL EQUITY 22,857,780 12,363,394 13,198,294 39,243,526

TOTAL EQUITY AND LIABILITIES 33,036,830 51,547,594 87,331,160 147,844,139

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INCOME STATEMENT (ZMW) 2012 2013 2014 2015Audited Audited Audited Audited

TOTAL FINANCIAL INCOME 6,274,614 11,556,509 22,102,339 36,264,844 Interest and fee income from loan portfolio 5,251,169 11,099,681 21,184,575 37,433,177 Cash Interest and fee income 4,781,474 10,715,604 20,612,578 36,453,051

Accruals ( Interest receivable) 469,695 384,077 571,997 980,126

Interest and fee income from investments 483,747 160,629 299,300 113,366

Other income from financial services 539,699 296,199 618,464 -1,281,699 TOTAL FINANCIAL EXPENSES 158,909 2,306,632 6,376,821 8,295,573 Interest and fee expense 158,909 2,306,632 6,376,821 8,295,573 for Client Deposits 22,932 105,186 499,712 1,599,526 for Borrowed Funds 135,977 2,201,446 5,877,109 6,696,047 Other financial expenses - - -GROSS FINANCIAL MARGIN 6,115,705 9,249,877 15,725,517 27,969,271

Net loan loss provision expenses 403,830 671,164 1,282,760 1,014,388

Exchange differences: gain/(loss) 28,506 -348,877 193,580 -9,796,381

NET FINANCIAL MARGIN (after provisions) 5,740,381 8,229,837 14,636,337 17,158,502

Other operating income (non-extraordinary) 777,796 781,742 885,502 1,601,340 Operating expenses 11,761,522 19,506,531 37,747,870 50,058,312 Personnel expenses 5,616,301 10,328,309 14,008,164 20,758,988

Administrative Expenses 6,145,221 9,178,222 23,739,706 29,299,325 NET OPERATING MARGIN -5,243,345 -10,494,953 -22,226,030 -31,298,471

NET INCOME (before donations and income-taxes) -5,243,345 -10,494,953 -22,226,030 -31,298,471 Donations 1,000 - - -

Taxation on income and profits - - -3,924,536 NET INCOME -5,242,345 -10,494,953 -22,226,030 -27,373,935