Specialist lending company Finbond has joined a number of listed companies in scrapping its dividend payment for its 2020 financial year adding that it will freeze salary increases as it navigates the effect of the coronavirus.

The lender, which plays in the unsecured lending credit landscape in SA and North America, reported its full-year results to end-February on Friday, sending shares in the company to trade 1.88% lower.

Despite the adverse conditions in SA including the economic meltdown, high joblessness rates and slowing household disposable income, which has affected new business growth, turnover for the period grew 1.7% to R2.62bn with a majority of its profit derived from unsecured personal loans, the company said.

Business volumes in SA dropped 70%, where only banks and not microlenders were considered essential services under lockdown levels 4 and 5 were allowed to operate.

In SA Finbond granted R1.55bn in loans and received cash payments of R2.31bn from clients.

The credit provider said the SA Social Security Agency’s (Sassa’s) card migration to the SA Post Office card was still hurting profit.

Cash received from clients as a percentage of loans granted averaged 133% at the end of February compared with a previous  138%, due to a reduced loans and advances portfolio as result of the Sassa transition, said Finbond.

In North America, Finbond’s business operated fully with all of its business deemed essential. Business volumes, however, pummelled 50% in the region. However, the company said it continued to see promising new business stating it expects economic recovery in the US.

Findbond said it did not expect the tough macroeconomic challenges in the markets it operates in to abate, saying it sees a further deterioration of market conditions, which will ultimately affect the company’s 2021 results.