By Erum Zaidi, The News International
KARACHI: Microfinance banks have emerged as key players in enhancing the process of financial inclusion in Pakistan; however, the lack of funding resources, capacity-building and product innovation remains the major challenges for the microfinance banking industry, said experts.
Deposits are stable source of funding for the banks but, in terms of microfinance banks, by and large, the growth in deposit mobilisation seems to have been sluggish, they said. Consequently, these banks rely on subsidies and grants rather than becoming fully sustainable in generating substantial internal funding, they added.
In addition, meeting capital adequacy requirement is also an important issue for the majority of the microfinance banks, said experts.
Presently, there are 10 full-fledged licensed microfinance banks operating in the country; seven of them are nationwide, one is at a provincial level (Sindh), while the remaining two are district-based (Karachi district).
A general look at funding composition of the microfinance banks reveals that apart from a few banks, the deposits of most of the microfinance banks are less than the total loan they disbursed to various categories of borrowers. Therefore, it does not seem a profitable industry as compared to commercial banking industry.
The microfinance banks can accept and intermediate deposits from the people to finance their loan portfolios, said experts. Moreover, some of the microfinance banks offer microinsurance in the areas of life and health-servicing.
“Microfinance banks are relatively new in the sector so it will take some time to create an impact and develop a public confidence; however, the microfinance banks are still able to mobilise around 20 billion deposits as a whole,” said M Mobeen Yaqoob, head of finance and accounts at the Kashf Microfinance Bank Limited.
The countrywide microfinance banks, as per the State Bank of Pakistan, are required to comply with the minimum capital requirement of Rs1 billion as of December 31, whereas, the microfinance banks operating at the district level have to meet the minimum capital requirement of Rs300 million by the end of the year.
“As far as capital constraints are concerned, yes, initially a few banks do face problems of capital adequacy ratio and paid-up requirements but with the support of the State Bank they are able to manage the shortfall either through further investments or by a combination of telecommunications and microfinance banking, which also give path to enter into branchless banking,” said Yaqoob.
Of five major microfinance banks, three are profitable and growing their portfolio with the average annual rate of 35 percent, which is quite encouraging. After introduction of branchless banking (remittances, deposits, etc) and so far successful operation of it, the microfinance sector is now getting matured and showing faster penetration in the industry, said Yaqoob.
The State Bank in its “Development Finance Review” for the period April-June 2012 issued recently mentioned that four microfinance banks have their paid-up capital equal to or exceeding Rs1 billion.
The microfinance banks normally follow and maintain the benchmark of three percent non-performing loans but, in the past, they used to bear the hit due to calamities such as floods and earthquakes, he added.
“With an impressive growth in branchless banking, the microfinance banks are capable to diversify their deposit portfolios. Savings are attracted by adopting new technologies and alternative delivery channels such as mobile phone and agent-banking. Through mobile banking accounts, money can be transferred and loan can be repaid to the microfinance creditors,” said Nadeem Hussain, president and chief executive officer of Tameer Microfinance Bank.
According to estimates, around Rs1 billion worth of domestic remittances are channelised by mobile accounts across the country on monthly basis, said Hussain.He said the microfinance banking sector of Pakistan has vast potential to attract foreign investment, therefore, strong and strategic foreign players are coming here to explore opportunities in the sector.
There is a significant increase in the market share of regulated microfinance banks within the overall microfinance sector, he said.Advans Microfinance Bank Limited has just been allowed to commence business on January 3.
The microfinance banks continue to dominate the sector in terms of both, active borrowers and gross loan portfolio, with a market share of 42 percent and 56 percent, respectively during the third quarter (July-September) of calendar year 2012, said a quarterly update on the microfinance outreach in Pakistan issued by Pakistan Microfinance Network (PMN).
Savings had increased by 10.11 percent to Rs20.13 billion by the end of the third quarter. Microfinance banks continue to hold the largest share in the value of savings (91 percent) mainly due to an average saving balance of Rs10,000, which remains the highest among peer group.
Potential microfinance market in Pakistan is around 28-30 million people, of which only 2.4 million are served by microfinance institutions and among them microfinance banks contribution is only of one million borrowers.
The agriculture sector dominates as the largest provider of employment in Pakistan, with a share in the overall employment of 45 percent. Most of the microfinance banks operating in Pakistan are serving in the rural areas, obviously, due to high potential. They also showed their presence in remote areas.
The primary reason for this inclusion is that microfinance in Pakistan is still largely regarded as a social service rather than a financial service. Furthermore, the small and medium enterprises, which constitutes 90 percent of business in Pakistan and is regarded as an important instrument of employment promotion, is neither being served by mainstream banks nor the microfinance sector.
According to Small and Medium Enterprises Development Authority (Smeda), there are approximately 3.2 million business enterprises in Pakistan, which employ 80 percent of the non-agricultural labour force and their share in the annual GDP is approximately 40 percent.
However, unlike large enterprises in the formal sector, a small and medium enterprise is constrained by financial and other resources.
The SBP has recently allowed the microfinance banks for enterprise lending up to 500,000, so there is a great opportunity in the sector to capture non-served SME sector as well. So, with the microfinance sector penetration of only eight percent, there is still a large potential market for microfinance in Pakistan to be captured by 10 microfinance banks.
The State Bank of Pakistan has taken several measures for smooth functioning of the microfinance banks such as it introduced an authenticated information sharing mechanism such as “Microfinance – exclusive Credit Information Bureau recently to reduce the credit risk cost of the lenders, besides lowering the loan price for the borrowers.
This measure will improve the credit quality and also credit risk cost depending upon the service fee levied by the regulators.
The International Strengthening Fund (ISF) has approved Rs632 million for 13 microfinance providers, including top- and middle-tier finance banks and microfinance institutions. The ISF has also provided a 10 million pounds facility, aiming at raising commercial debt from non-bank sources and to diversify sources of commercial capital for microfinance providers.
The SBP also allowed microfinance providers to mobilise funds from non-bank sources and capital markets.
By Biodun Coker, Business Day Online
Nigeria today is at the cusp of a paradigm change in its growth and its position in the world, making it pertinent that both men and women act decisively in order to capture this opportunity.
In doing this, a country and its people need to think big and scale up rapidly in each and every area, be it education, infrastructure, industry, financial services or equality of both genders, which to some extent are lacking in the country at the moment.
Access Bank, identifying the need to fill the gaping vacuum, set up the GEM programme targeted at empowering aspiring female entrepreneurs. Under this programme, the bank provides women with resources they need to grow their business. It encompasses finance, capacity building, networking, advisory services and market collaborations.
The bank’s products are defined by institutional need to address obvious gaps in the banking landscape and the society.
Largely, they are products of research hence their aptness at addressing consumer needs. The bank has introduced a number of industry defining products, services and initiatives but its GEM is particularly unique because of its visible impact on the economic development of the African continent.
The introduction of the GEM product is a demonstration of its commitment to its objective of becoming a catalyst for economic development on the African continent, and quest for credible partnership that accentuates its role as an economic ambassador of the African continent.
On broader scale, the bank’s GEM is one of its responses to the issue of financial inclusion for which it has evolved a clear strategy. Other responses include Access Bank Early Savers Account among others.
GEM is a programme designed to provide financial support, advisory services and improve the capacity of female entrepreneurs in developing markets. It is a product borne out of the Bank’s collaboration with the International Finance Corporation (IFC), an arm of the World Bank under its Gender Entrepreneurship Markets Programme (‘GEM’). This initiative grants women-owned business access to funding and increase their contributions economic development with positive effects on employment generation and GDP growth.
Through this partnership, the bank had sought an avenue for boosting the capability and capacity of female entrepreneurs and provided them with a platform for actualisation of their business goals. On the strength of its credibility and acceptance in the international financial community as validated by this uncommon partnership, Access Bank has succinctly projected the potential value and contribution of this segment of the Sub-Saharan economy and attracted much need support from credible multilateral agencies and international finance organisations.
Today, it is an incontrovertible fact that serving this segment of the financial market provides a sustainable business opportunity for the financial institutions and is a tactical avenue for boosting economic performance in the sub-region.
Its pioneering role in identifying this market segment has significantly impacted retail market in Nigeria and empowered the operations of women-owned SMEs.
A novel idea Access Bank GEM programme is the first of its kind in Africa – a partnership between IFC and a commercial financial institution that emphasises access to finance for women entrepreneurs. This partnership with IFC has earned the bank several international awards.
It would be recalled that it entered into a partnership with the IFC to promote an initiative in Nigeria through its Gender Empowering Program (GEM) in 2006. Under the program, IFC provided a start up fund of $15 million facility to Access Bank specifically to provide financing for female entrepreneurs as well as provide technical and financial support to female entrepreneurs.
The IFC/Access Bank alliance has successfully provided support and incentives to female entrepreneurs through Access Bank’s Gender Empowerment Programme. GEM is a cross-cutting initiative designed to mainstream gender issues while leveraging the potentials of female entrepreneurs in emerging markets to activate economic development in the sub-region.
Over 500 female entrepreneurs have been successfully trained on ‘how to grow their businesses’ and provided advisory services that have transformed their operations.
The GEM initiative has one major goal: to help female-owned businesses grow. And in fulfillment of this, Access Bank has provided N2.5 billion to women-owned businesses in last 5 years. Also, they have drawn huge benefits from access to information and training designed to boost their capacity.
They provide support in the following ways: Networking, Training, Advisory services and Finance:
Through Networking, they recognize the importance of networking when building and growing business. Access Bank also runs quarterly networking sessions for our members to ensure that they have the most up to date information to help their business.
The Central Bank of Nigeria (CBN) has expressed readiness to reduce the number of Nigerians that have no access to financial services from 46 per cent to 20 per cent by the year 2020. The apex bank disclosed this in a circular titled: “Exposure Draft of Financial Literacy Framework in Nigeria.”
It was addressed to banks, other financial institutions and stakeholders and obtained from the apex bank’s website.
Nigeria is one of the countries with lowest literacy level , with the literates population puts around 30 per cent. The development has affected participation in banking industry, as well as the economy.
CBN, in its review of on-going reforms said its committed to reduce financial literacy and further improve the industry.
To achieve this objective, CBN has designed a financial literacy framework that aimed at educating Nigerians to improve their understanding of financial products, develop their skills, and confidence to become more aware of financial risks and opportunities.
Subsequently, the banking watchdog has come out with an exposure draft on financial inclusion strategy in Nigeria. It said the draft would articulate a strategic direction for the implementation of financial literacy programmes in Nigeria.
The draft reads: “In continuation of the development role in the Nigerian economy, the Central Bank of Nigeria has developed an Exposure Draft on Financial Inclusion Strategy for Nigeria. The draft was prepared by a German-based Consultancy Firm, Messrs Roland Berger in collaboration with the Enhancing Financial Innovation and Access( EFINa), Lagos, Nigeria.
“The strategy is aimed at reducing the percentage of adult Nigerians excluded from financial services from 46.3 per cent as at 2010 to 20 per cent in 2012. This is with a view to enabling them to have access to financial services, engaging them in economic activities and contribute to the economic development of Nigeria.”
The statement further said CBN is soliciting for inputs from the public to enable the bank finalize the document and further achieve success. It said responses from the stakeholders would play major roles in the efforts to reduce the level of the unbanked population and further make the industry more stronger and competitve.
By Collins Nweze, The Nation
By Onyinye Nwachukwu, Business Day Online
Reducing the huge population of Nigerians who still lack access to financial services is certainly a major challenge facing the Central Bank of Nigeria (CBN), particularly as it tries to create a robust banking sector and drive one of its mandate of promoting a sound financial system and fostering Nigeria’s economic growth.
Although a global phenomenon, Nigeria is one of African countries habouring huge number of its citizens with greater number of population without access to financial services. According to Kofi Annan, former United Nation’s Secretary-General, “The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector.”
Financial exclusion is the unavailability of banking services to people living in poverty. It is believed to be one factor preventing poor people from exiting poverty, by forcing them to manage their finances on a cash-basis only and restricting their access to equitable sources of credit. Financial exclusion can therefore make poor people vulnerable to loan sharks.
Unfortunately, robust economic growth cannot be achieved without putting in place well-focused programmes that increase access of poor and low income earners to factors of production, especially credit. Microfinance is about providing financial services to the poor who are traditionally not served by the conventional financial institutions.
For instance, a study by the Enhancing Financial Innovation & Access (EFInA) in 2010 revealed a marginal increase of those served by formal financial market from 35 percent in 2005 to 36.3 percent in 2010, five years after the launching of the microfinance policy.
But, when those that had financial services from the informal sector such as savings clubs/pools, ‘Esusu, Ajo,’ and money lenders were included, the total access percentage for 2010 was 53.7 percent, which means that 46.3 percent or 39.2 million adult population were financially excluded in Nigeria. Nigeria ranked below South Africa, Kenya and Bostwana with 26.0 percent, 32.7 percent, and 33 percent, respectively.
The survey, EFInA ‘Access to Financial Services in Nigeria 2010,’ showed that the main barriers why people do not have bank accounts include unsteady income, unemployment and distance to bank branches.
To further buttress the high level of financial exclusion in the country, Sanusi Lamido Sanusi , the CBN governor, puts the ratio of bank branch to the total population at 24, 224 persons.
According to him, there were 24 deposit money banks with 5,789 branches and 816 microfinance banks, bringing the total bank branches to 6,605, indicating a high level of financial exclusion. Financial inclusion, the opposite of exclusion or inclusive financing, is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sine qua non of an open and efficient society.
It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy.
The term “financial inclusion” has gained importance since the early 2000s, and is a result of findings about financial exclusion and its direct correlation to poverty.
Financial inclusion is now a common objective for many central banks among the developing nations, particularly as it remains a major factor in driving economic growth they are committed to.
Against this backdrop, the apex bank revised the 2005 Microfinance Policy, Regulatory and Supervisory Framework for Nigeria in April, 2011.
Besides, it has undertaken a number of strategic initiatives, including a commitment at the 2011 Alliance for Financial Inclusion (AFI) Global Policy Forum held in Mexico, to reduce Nigeria’s financial exclusion rate from 46.3 percent to 20 percent by 2020.
Other strategies include, the conclusion of the National Microfinance Development Strategy (NMDS) – a roadmap to guide orderly growth in the industry and enable microfinance institutions (MFIs) and MFBs to be viable to attract investments and enrich its monetary policy projections and enhance transmission mechanism.
The CBN also developed the National Financial Inclusion Strategy (FIS) that will further facilitate access to the otherwise disadvantaged groups like the farmers, women, aged citizens, self-employed, jobless school leavers, and SMEs considered by banks as costly, risky and unviable.
Sanusi said that the microfinance development fund (MDF) would be established in 2012 to improve access to affordable and sustainable source of finance by microfinance institutions and microfinance banks.
He is hopeful that the Cashless Nigeria Initiative, which commenced in Lagos in January 2012 and would be flagged off in other states of the federation, would further boost the payment system and improve access to financial services.
In his view, Modupe Ladipo, CEO, EFInA, recommends that in order to achieve universal access to financial services, banks will need to adapt their systems to low-value, high volume transactional environment with numerous points of access, at which people can conveniently conduct financial transactions.
By Amaka Abayomi, Vanguard
Operators in the microfinance sector have lauded the proposed mergers and acquisition option for microfinance banks (MfBs) by the Nigeria Deposit Insurance Corporation (NDIC), saying such is a welcomed development that would further enhance their operations.
Speaking on The Impact of Microfinance Sub-sector in Promoting Financial Inclusion in Nigeria, at the just concluded Financial Correspondents Association of Nigeria (FICAN) organized workshop in Dutse, Jigawa State, the Director, Special Insured Institutions Department, NDIC, Mr. B. D. Umar, said rather than closing MfBs, mergers and acquisitions should be encouraged.
“Mergers and acquisitions as opposed to outright liquidation should be encouraged in the sub-sector as obtains in other jurisdictions like Germany where no Co-operative Bank (equivalent of an MfB) has failed in the past 50 years).
“We have been able to establish that, so far, MfBs in Nigeria have generally performed sub optimally even if they are assailed by some operational challenges. We noted that the reform of the sub-sector is currently receiving the priority attention of stakeholders, particularly the Central Bank of Nigeria (CBN) and the NDIC so as to reposition it for enhanced service delivery.”
He also advised operators to ensure that they have the relevant skills and diligently work towards the implementation of the Revised Microfinance Policy and other reform initiatives that had been put in place by the regulators.
“Another challenge of the sub-sector is lack of relevant skills. This is because microfinance banking is different from conventional banking as it involves the provision of financial services to the lower segment of the market. Microfinance banking, therefore, requires specialised skills which are presently lacking in the country.”
This, MfB operators have said would boost the activities of operators and lead to enhanced provision of financial services to their clients, if the regulatory authorities would approve that option.
For the President, National Association of Microfinance Bank (NAMB), Mr. Mathias Omeh, having strong players in the microfinance sector can only be achieve through the options of mergers and acquisitions.
“We have encouraged that all along, especially for the weaker one to be acquired ands for the stronger ones to merge. It a unit MfB with unimpaired capital of N60 million can merge with another, it would be good for the sector.
“We need stronger MfBs that would be financially capable of providing financial services to the under-banked and unbanked, and mergers and acquisitions are sure ways of achieving that.”
Agreeing with him is the Chairman, Lagos State chapter, NAMB, Mr. Olufemi Babajide, who said that the state chapter has already inaugurated a Committee to look into the possibility of getting the regulatory authorities to approve that.
“It is a welcome development and we want all our members to come together and consider it, especially the financially weaker banks. Mergers and acquisitions are better that outright liquidation because if two or more weak Mfbs decide to merge, the result would be a stronger MfB that can perform its functions.”
While agreeing that it is a better option than liquidation, the General Secretary, Lagos State NAMB, Mr. Joseph Ajayi, urged those MfBs asked to recapitalize to consider the option as it may be their likely chance of remaining operational.
Enhancing Financial Innovation & Access (EFInA), a financial sector development organization that promotes financial inclusion in Nigeria, in its recent evaluation method has called for increasing access to finance through agent banking in Nigeria, as it cited unsteady income, unemployment and distance location of bank branches in the country as major barriers at its recently forum in Lagos.
According to management sources, agent banking refers to the delivery of financial services outside conventional bank branches and that entails the use of non-bank retail outlets that rely on technologies such as point-of-sale (POS) terminals, or mobile phones, for real-time transaction processing.
Heads of Retail Banking and Strategy of the Deposit Money Banks and Mobile Payments Operators in Nigeria were among the participants that highlighted the most effective methods for developing an agent network in Nigeria and its benefits at affordable costs and in a wider range of income segments of the society.
Chief Executive Officer, EFInA, Modupe Ladipo, said “in order to achieve universal access to financial services, banks will need to adapt their systems to low-value, high volume transactional environment with numerous points of access, at which people can conveniently conduct financial transactions.”
EFInA also presented findings of their evaluation and assessment of global agent banking models, and highlighted the key elements that should be adopted in the regulatory framework for agent banking in Nigeria.
Keynote speaker, Chief Executive Officer, Top Image, Ms. Jennifer Barassa, said that agents play an important role in acquiring new customers that enable them to transact and keep the customer satisfied.” She also outlined the challenges of agent banking and as well possible remedies.
By Chris Agabi, Daily Trust
The Managing Director Lapo Micro Finance Bank, Mr. Godwin Ehigiamusoe has called for a healthy partnership between the commercial banks and micro finance banks in order to deepen financial inclusion in Nigeria.
Ehigiamusoe made the call in Lagos at the public presentation of his book “Issues in microfinance: enhancing financial inclusion.”
He noted that the two institutions shouldn’t be competing but should complement each other since they both provide unique financial services.
He reiterated that the microfinance banking sector, though not a charity sector, is critical to wealth creation among the low income and rural poor.
He decried the low understanding of the microfinance banking model in Nigeria, adding that his book was to provide critical knowledge on the basics of micro finance business practices.
Ehigiamusoe also noted the lingering financial crisis in the banking sector which he said was crippling the growth of the microfinance sector.
Reviewing the book, Dr. Steve Olusegun Ogidan, the managing consultant/CEO Successory Nigeria Ltd & Global Knowledge Group noted the dearth of literature in the concept of micro financing, adding that the book provides useful insights into the business of micro financing.
By Felix Njini, The Southern Times
The majority of Africa’s billion-plus population is locked out of the continent’s financial sector. This is despite Africa having a booming financial services sector.
Research by Standard Bank, which is among institutions painting a rosy picture of Africa’s economic potential, says growth in the financial sector – while laudable – has not been lock-in-step with the availability of financial services to the rural poor.
Banking services remain, to a large extent, a preserve of urban dwellers.
More middle-income earners have swelled the ranks of Africans demanding more sophisticated banking, thereby supporting growth in the financial services sector.
Coupled with increasing flows of private equity funds into the continent, Africa’s financial sector is well-positioned for growth.
However, there is little evidence that the growth is benefitting the majority of the continent’s dwellers.
Standard Bank research analyst Simon Freemantle argues that banking the unbanked represents both a challenge and an opportunity for transformative financial institutions.
The statistics on the population of Africans left out of the banking systems are startling.
In Zambia, for example, only a quarter of the country’s population has access to a bank or any other formal financial institution.
Freemantle says about 15 percent of Zambia’s population accesses finance outside the formal banking channels and this means that two-thirds of the country’s population is virtually financially excluded.
In Namibia, about 48 percent of the population has access to formal banking channels and the figure is 46 percent for Botswana.
The situation is worse in Mozambique and Tanzania, where less than a quarter of the population access formal banking channels.
Of Nigeria’s 150 million people, 120 million have no access to formal banking channels.
Surprisingly, in regional economic powerhouse South Africa, which is said to have the continent’s most advanced economy, a quarter of the population is excluded.
One in five adults in Africa has an account at a formal or semi-formal financial institution and the ratio of liquid liabilities to GDP on average is around 32 percent compared to East Asia and the Pacific (49 percent) and developed markets (100 percent).
In the majority of African countries, banking penetration levels are as low as five percent.
Freemantle says in Nigeria, 15 percent of adults have access to a bank account and in Uganda, only a one-fifth of the population can access a bank account at a branch.
Micro-finance institutions in countries like Kenya have helped improve access but commercial banking access is still low, analysts say.
Insurance penetration rates are also still low with the exception of South Africa, which reported the sixth highest rates in the world (12.89 percent).
On average, Africa’s insurance penetration rate stands at just 3.3 percent.
‘Access to finance has been, and in the majority of African countries remains, one of the continent’s largest impediments to swifter socio-economic advance.
‘Africa requires not only capital, but also more effective and inclusive means of channeling this capital in ways that are most productive. Robust financial systems are undoubtedly a critical cog in ensuring more rapid, and far reaching growth,’ Freemantle said.
Notwithstanding the failure by banks to spread access, Standard Bank says Africa’s financial services sector will likely make up 20 percent of collective GDP by 2020 (currently 10 percent), with much of the growth coming from retail banking.
Banking in 16 African countries will boost financial assets by as much as US$1.4 trillion by 2020.
South Africa dominates the financial services industry, accounting for 30 percent of all of banking assets on the continent.
Of total assets (US$935 billion) of Africa’s top 200 banks, about 46 percent are held by South African institutions.
Standard Bank says that virtually all Sub-Saharan Africa’s top 100 banking assets are held in South Africa, Nigeria, Angola and Mauritius.
About 80 percent of the continent’s top 200 banks are in Nigeria, South Africa and North Africa.
‘A range of local and international financial institutions have either arisen in or converged on many of Africa’s fast growing emerging and frontier economies, eager to participate in the sector’s nascent, yet compelling growth,’ Freemantle said.
Africa’s banking growth will be anchored on a rising middle-income population though challenges of introducing rural populations to banking services will remain.
The growth of the financial services sector will also be aided by increasing flows of private equity funds into Africa.
Private equity investments as of 2007 were around US$3.5 billion. There are currently 31 large fund managers in Africa and seven private equity funds dedicated to infrastructure financing.
South Africa dominates the private equity market, attracting 80 percent of all Sub-Saharan capital (Nigeria, 10 percent).
The United States and Europe are the major sources of private equity funds into South Africa.
‘The deepening of Africa’s financial sector is both a result and a driver of the strong macro-economic gains reflected across several of the continent’s core markets over the course of the past decade.
‘That said, room for growth and improvements exists in abundance,’ Freemantle said.
‘For Africa’s youthful aspirants, the ability to access finance for vehicle and home loans, to start or expand entrepreneurial ventures, or to fund further tertiary education will prove immensely supportive in driving the next phase of the continent’s erstwhile commercial re-invigoration.’
If you want to help people from getting literally locked out of their homes or cars, you may appreciate information on locksmith courses.
By Precious Iyomere, Vanguard
Stanbic IBTC Bank has reiterated its commitment to facilitating financial inclusion in Nigeria by making banking easier and more accessible to operators in the informal sector through its E.susu product and service provided by the banks agent network.
According to a statement by the bank, E.susu is an easy to use transaction and savings account product which forms part of the bank’s long-term strategy to build a ‘bank for the people.’
Commenting on the forum organised to reward E.susu agents from the Lagos and Ibadan regions of the bank, Mrs. Sola David-Borha, Chief Executive Officer, Stanbic IBTC Bank said that the product and supporting agent network enables individuals and businesses in the informal market segment to make financial transactions conveniently and at low cost.
“Stanbic IBTC provides its customers with products and services that they can trust and embrace without fear of losing their money. E.susu takes the traditional mode of savings to a new level by deploying the very best processes and systems.
The product allows the activation of various personal finance pockets for those who want to save to meet specific future needs whilst giving customers the freedom to choose how much and when they want to save,” she explained.
She added that the services on the E.susu banking platform are extended to everyone who can use them, including people at the lower rungs of the economic pyramid, traders and those living in rural areas.
A unique blend of traditional banking practice and modern information technology, Stanbic IBTC’s Agent Network provides a channel for accessing alternative financial services by a diverse range of people who are currently underserved by formal banking, breaking down the walls that currently separate the unbanked from the much broader world of financial systems.
Also speaking at the event, Ada Phil-Ugochukwu, Head of Inclusion Banking, Stanbic IBTC Bank said that the bank’s targeting of the trader segment and the unbanked with E.susu portends huge benefits for the Nigerian economy.
The product has such great features like zero minimum opening balance, a simple account opening process and easy account access for customers in any of the bank’s branches. Agents sign-on to our network and customer uptake of the product is increasing geographically as we scale up our operations.
Customers are also able to access their accounts from any of the bank’s ATMs or other banks’ ATMs across the country,” she said.
She added that the bank has already rolled out the product in key commercial and urban markets in most parts of the country.
A member of Standard Bank Group, Stanbic IBTC Bank is a full service universal bank with a clear focus on three main business pillars -Corporate and Investment Banking, Personal and Business Banking and Wealth Management. Rooted in Africa with strategic representation in key sub-Saharan and other emerging markets, Standard Bank is a bank with a global sweep.
The holding company is based in Johannesburg, South Africa, and listed on the securities exchange operated by the JSE Limited as Standard Bank Group Limited. It has been a mainstay of South Africa’s financial system for almost 150 years. Standard Bank is a leading African banking group which now spans 17 countries across the African continent.
By Dias Nyesiga, The New Times
Microfinance Institutions (MFIs) must be innovative to avoid duplication of financial products if they are to promote financial inclusion for all.
The Association of Microfinance institutions-AMIR says that the current MFIs’ rush to rural areas to tap the unbanked poor would not reap the expected results unless new products are crafted.
“MFIs must know that products that work here in town cannot work well in rural areas, they need to craft new products that will help these poor people access financial services,” Rita Ngarambe, the Executive Secretary AMIR noted.
Ngarambe says that many MFIs operating in towns open branches in rural areas and still use similar methods in providing services to the people.
“Because of this problem of MFIs using the same products, it is affecting them greatly especially with increasing Non Performing Loans, poor governance and operational risks,” she explained.
She further lamented that the lack of communication skills among MFIs has affected the promotion and development of their products and catalysed low turn up of clients as they cannot understand the services available in MFIs.
Many microfinance institutions and banks design product information in a complex manner unfamiliar to rural poor.
However, Ngarambe noted that AMIR embarked on training MFIs on financial reporting, accountability and customer care as one way of helping them break through challenges hampering their rural performance.
The Rwanda cooperative alliance is optimistic that the tremendous performance of Umurenge SACCOs need stable MFIs that are able to serve the demand already created by the SACCOs.
“We have achieved a lot in cooperatives and what we need now is strong financial institutions that are able to provide banking services,” Audace Bimenyimana, of Rwanda Cooperative Agency said.
He added that more cooperatives are opening and savings have increased due to the initiatives put up to promote rural financial inclusion.