Wigwe: Our Target is to Have Strong Presence in Major Trade Centres in Africa

 

The Group Managing Director/Chief Executive Officer of Access Bank Plc, Mr. Herbert Wigwe, in this interview by Julia Chatterley, Anchor of First Move on Cable News Network, CNN, spoke about the bank’s aggressive African expansion and its drive to serve 50 per cent of Nigeria’s bankable population. Excerpts:

Core to being that payment gateway to the world is expansion and Access Bank has had an incredible year of expansion, particularly expanding to South Africa, Botswana, Mozambique, Zambia, talk to me what this is all about?

Let me put it this way: It is something that we had been planning as part of our corporate strategy plan since 2017, and the whole idea had been to support our corresponding banking business, support our payment business and to ensure that there is greater trade within the continent. So for us, what are we doing? We are basically making sure that we have strong presence in all the major trade centres in the continent, to make sure that we use Access Bank United Kingdom as a strong anchor and that we can support corresponding banking and that we can basically build that model around the continent that supports payments within the continent. I think we are on track in terms of profitability our different franchises are doing extremely well and I think 2022 is actually going to be a big year for the institution.

The one that catches my eyes is South Africa. This is a tough and mature market that is undergoing significant digital disruption as well in the financial space. What is the strategy there?

That was same thing when we went to the UK, people said it was a very tough market and I think we are almost the strongest African bank in the UK. Now, what are we doing in South Africa? We are basically going to ensure that it comes a hub for the continent as far as correspondent banking services are concerned, we would help support corporates because there are interesting niches in that market that are yet to be served and we would help to ensure greater financial deepening. Without revealing much of our strategy, there are interesting markets that have not been served that we would basically cater for. But apart from that, you need to see us in the context of a large player in the continent, banking several corporates in different parts of the continent and putting that whole network together is extremely important. But beside that, trade is important, correspondent banking is important and of course facilitating the development of the country within the South African context, which is of course the largest monetary zone in the continent would be very important for us.

Thirty per cent of your profit is actually going to be from outside Nigeria. One of your ambition is to provide finance access and banking services to one out of every two Nigerians. Where are you today and to what extent are those you don’t currently service, are being serviced by other financial players and do you cherry-pick who your clients are?

We have about 200 million people in Nigeria and there is still a very large unbanked population. We have people outside of major commercial cities who don’t have a bank to basically service them. What are we doing? Apart from ensuring that today we bank over 50 million Nigerians, which means that we bank 25 per cent of the population, but in terms of the bankable population, we have one-third of the bankable population. Now, banking one out of every two Nigerians should take us to about 100 million people. Now, in terms of bankable Nigerians, it would be anywhere between 80 million and 100 million for us to actually get there. So, we are going to be pursuing this activity through our agency banking network and the fact that we have created a different type of branch network in specific localities that are outside the major city. Today, we are probably going to be bringing in about 700,000 customers every month and I think that figure is expected to grow a lot more as we get into 2022 with some of the things which we have done and the increase in agency banking that we have done. Now, the question as to whether we need all of those people, is the fact that if you went back 20 years ago, you would have said some of these customers didn’t have enough disposable income to be banked. But, technology has changed that whole narrative. There is a cheaper cost to serving all of these people. But beside that, we see ourselves as one of those institutions that are leading change in Nigeria by providing and ensuring greater financial inclusion and that in itself would help to jumpstart and support the economy. So, there are several reasons why we are doing this and at the end of the day it is profitable to bank them. High net worth individuals, private banking and affluent professionals, is a market that we are very familiar with, but it is a very competitive market and the margins are thinning out there. So, what we need to do is to take it down market and ensure that there is greater financial inclusion, just in line with some of the things the central bank has been pursuing by the way and to ensure that all of this can help in the development of our market and ensure greater financial deepening.

You have doubled information technology spending between 2019 and 2020, so it is something that you are incredibly focused on. How do you choose the customers you want to go to, I know you are incredibly focus on access to finance for women, helping them build their businesses as well, but there are the generation Z that would never go to the branch and you have another class of customers that prefer that touch point with the branch even within the disruption we have seen in the market and it is a huge continent?

There are two perspectives to banking. We have the traditional branches that are serving customers who may want to go to some branches. But let me also let you know that if you look all over the world and ask yourself if the banks are shutting down branches? The reality is that the banks still need a reasonable number of respectable branches. Now, we also have those digital solutions that serve customers who don’t even want to get to the bank branch. So, that Gen. Z customer base is still being banked by Access Bank. Now, we understand that the fintech players may be getting an interesting proportion of that customer base. But guess what? At the end of the day, if you have physical branch, even if the customer doesn’t want to get into a bank branch, it helps from an integrity stand point for the customer to just know that he has a place to go to. But remember that it is not just about transactional banking, it is about supporting other aspects of their lifestyle. It is about giving them a descent mortgage, it is about providing several things, some of which they are not even aware of. But we are making sure that we serve those customers properly. But, let me tell you about some of the great things which we have done. In 2006, we started what we refer to as the Gender Empowerment Programme. At that time, what we wanted to do was basically to help provide financial services to women and help support their businesses grow. We basically set target, working with the International Finance Corporation, of how many women we wanted to support and what threshold we wanted to take them as far as their turnover and profitability was concerned. We did extremely well and we had less than one per cent in terms of default as far as the loans that we granted was concerned. But eight years after, in 2014, we created the ‘W’ programme, which is much more robust and it is about inspiring and connecting women. Right from the professional lady who got married and want to have children or the business woman who needs to be supported or the sophisticated business person who is thinking about a bank that can help them. We went in deeper into maternal healthcare needs and schemes that no other institution would basically look at and which is the reason we have won several awards. Coming back to Nigeria and what it has done for women, half of our customer base today are women and because they know that they would be served by Access Bank and if they needed financing they would be supported by women. We also support them with various programmes that would help educate them on what to do to grow their businesses. So, these are the things that have made us so different and the fact that most women would rather bank with Access Bank than anywhere else.