Due to tight funding and high operating costs.

JOHANNESBURG (Reuters) - South African micro financier Blue Financial Services Ltd said on Tuesday it expected to report a loss in the half year to August 31 due to tight funding and high operating costs.

The company said restricted levels of funding due to the global financial crisis had limited its ability to grow its loan book, while operating costs were unproportionally high compared to revenue due to the lower than expected levels of funding.

It said a rise in the impairment of loan advances in the South African portion of its loan book and weaker African currencies against the South African rand had weighed on its performance.

"To enhance the provisioning policy, the company is undertaking a thorough review of its loan books in conjunction with the external auditors," it said in a trading statement.

Blue said it was delaying expansion into new markets in the short term and engaging with funders to restructure current funding and secure new funding lines.

The company said last week it had only raised half of its 800 million rand financing needs for the year but expected to continue its expansion plans.

Blue, which offers financial services to individuals including personal, education and home improvement loans as well as debt consolidation services, plans to put some money in a treasury hub in Mauritius and use it as a guarantee to tap local funding in Africa.

Intraday

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How HUGE is the loss ? RED financial services ... by African Down on November 10 2009, 20:02 Find this comment inappropriate? Report it

Now is anyone other than Julius suprised? Another lender who lent to everyone and when they could not keep the pyramid going then the whole thing collapses. by Buffett on November 10 2009, 23:31 Find this comment inappropriate? Report it

So, finally... Others saw this coming for ages. Guess the directors owe Stuart Theobald an apology - after they took him to task after he raised concerns in the press about this outfit recently. Cowboys may not cry, but they do die....All over Rover for this lot. by Ben on November 11 2009, 09:11 Find this comment inappropriate? Report it

Not surprised Ambitious expansion plans are difficult enough to manage without adding in the NCA and credit crunch into the mix. They should have undertaken the rating excercise early by Poked on November 11 2009, 09:33 Find this comment inappropriate? Report it

Cautionary They are probably going to be bought out a huge discount now! With the sahre price at 80c odd I don't think shareholders will realise more than 75% of that. Not good for the microfinancing industry as Frikkie pointed out, the demand is . .more there. . .less by Poked on November 11 2009, 10:08 Find this comment inappropriate? Report it

Another Ponzi Scheme Bites the Dust? Another Ponzi Scheme Bites the Dust? by A N Other on November 11 2009, 13:12 Find this comment inappropriate? Report it

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