Ecobank: Banking for the Bottom Billions Kigali, March 15, 2012
«WE DO NOT HAVE AN AFRICAN STRATEGY 2
AFRICA IS OUR STRATEGY» - Arnold Ekpe, Ecobank s Group CEO 3
Contents I Financially Excluded Bottom Billions 5 II Ecobank Group Credentials 11 4
Chapter 1 Financially Excluded Bottom Billions 5
Who and Where are the Bottom Billions? People who do not meet the requirement of traditional banks in operating savings accounts and/or accessing credit. Financial deepening is low 75% of the population are financially excluded 52% of Rwandans are financially excluded 20% of rural savings lost to fire/floods Women are most vulnerable (68% of Zambia women are financially excluded) Conflict areas (1 in 3000 has bank account in DRC conflict-affected areas at the height of the war) 6 6
Why is the Bottom Billions Financially Excluded? Demand Factors Low per capita income Illiteracy/ Lack of knowledge of financial services Lack of trust and savings culture Lack of property rights/titles Pricing and affordability Lack of bankable projects Supply Factors Poor risk sharing mechanisms Lack of product innovation Underdeveloped Payment System Reaching remote population 7 7
Importance of Financial Inclusion for the Bottom Billion Reduces poverty cycle Reduces vulnerability to shocks Increases productive investments/incomes Generates employment creation Promotes access to health and education 8
Providing Access to Finance for the Bottom Billion Meso Level Micro-insurance Financial literacy programs Adapt technology to finance (mobile banking can reduce transactions cost by 50%-- M-PESA) Micro level Target savings products Support to Agriculture Financing Support to Housing Finance Source: African Economic Research Consortium 9
Role for Parliamentarians Macro level Legal and regulatory framework for delivering financial services to the poor Protect consumers from predatory banking and abusive practices Contract enforcement on property rights and other areas Promote competition and removing barrier to entry Develop business infrastructure (rural roads, power, payment system) Information collection through credit use and registries/national identification system Harmonize Regional banking standards and protocols Source: African Economic Research Consortium 10 10
Chapter 2 Ecobank Group Credentials 11
The Leading Pan-African Bank Leading pan-african full service banking group Present in 32 African countries,more than any other bank Focus on Middle Africa, the fastest-growing and under-banked Vision to be world class and operates to international standards - reports in IFRS and US$ and compliant with IFC Corporate Governance principles 5 8.3 million customers, 23,000 employees, over 1,100 branches Listed on 3 stock exchanges: NSE, GSE & BRVM 12
Building Scale: Already top 3 in 15 African countries Seek to be a top three bank in each of our markets Scale in each market is critical for competitiveness: - ability to handle major transactions - enhanced lines of credit - economies of scale - enabling roles such as clearing We are currently No. 1 in 7 markets Chad, Burkina, CAR, Togo, Liberia, Guinea and Mali We are in Top 3 in further 8 countries: Sao Tome, Ghana, Cote D Ivoire, Senegal, Benin, Guinea Bissau, Rwanda, and Niger We are in Top 5 in Nigeria 13
Microfinance and Micro-Banking Ecobank is committed to providing the unbanked and underbanked with access to finance. Ecobank has established microfinance joint ventures in Ghana, Nigeria and Cameroon in partnership with Accion. We also have microfinance operations in Sierra Leone and Burkina Faso. 14
Providing Access for Financial Inclusion The microfinance joint ventures have been established to: Facilitate financial inclusion of the unbanked and provide financial services to the low income and un-banked through the most convenient and cost-effective channels Focus on the economically active business owners located within urban, and rural areas that need financial services to expand their businesses Offer through an omni-channel network simplified processes, service delivery with speed, competitive pricing, convenience and reliable services 15
Leveraging Technology Platform Leverage on the Group s strong technological platform and expertise to deliver innovative banking products and services wherever this target market is located Using technology enables the microfinance affiliates serve clients through integrated network of branches and branchless channels such as the ATM, POS, SMS and Mobile phone banking; and Utilize strong in-house data mining and analytical tools that provide information for risk-focused decisions in the areas of management decision making, new product development, profitability enhancement and customer satisfaction (speed and convenience) 16 16
Notable achievements through micro banking 131,562 Savers/businesses with total savings of US$20 million were given the opportunity to save and manage their funds through innovative, flexible and value-adding deposit products Customers benefit from free business advisory services provided by the field staff. The average savings balance is approximately US$100; reflecting the resolve to serve the low income segment 15,765 micro borrowers, including individuals and entrepreneurs were supported. Loan sometimes as low as US$40 per facility. The portfolio size as of December 2011 was $13 million 85 communities were reached with omni-channel programme to make banking accessible 17 17
Partnerships In addition to our retail operations, Ecobank also supports other microfinance institutions. The main banking partner for many of the leading microfinance institutions and cooperatives in Middle Africa, with an indirect reach to several million micro-clients. Partner with Bill and Melinda Gates Foundation to promote savings culture with a seed fund of $6 million Partner with Airtel to facilitate transfer of funds Partnership with USAID Partner with Western Union to facilitate remittances in addition to Ecobank Rapid transfer and Diaspora Account 18 Ecobank Capital 2011 Mobilizing Regional Banks to finance infrastructure: What role for Regional funds syndication? September 2011 18
Women in Business Ecobank has been involved in the Women in Business ( WIN ) program sponsored by IFC since 2009. Led by two senior executives within the group, our Vision is to be the FIRST CHOICE BANK for women across Africa. Programs initiated in Benin, Cameroon, Cote d Ivoire, Niger, Nigeria and Senegal By focusing specifically on women, Ecobank aim to promote and increase women access to finance; reduce gender based barriers in the business environment; Partner women professionals and women in other leadership roles; Create opportunities for stakeholders in terms of Business Development; Create a network of women in various endeavours across Africa, thereby introducing and facilitating inter-regional trade. Work closely with the IFC to develop the program. 19 19
Conclusions
Bankers and Parliamentarians as Partners Policy makers can provide the platform for supporting financial inclusion for the Bottom Billions Banks allied with policy makers can improve access to financial services through innovation, education, and technology Ecobank has been building a truly pan-african Bank with the scale and scope to provide financial inclusion for the bottom billions through appropriate access and availability; and pricing and affordability. 21
Thank you Questions