Rupert Scofield is an Agricultural Economist with 40 years of experience in developing countries. In 1984, he co-founded FINCA Microfinance Holding Company with John Hatch, and has served as its president and co-CEO since 1994. FINCA, a first-of-its-kind, socially responsible investment partnership for microfinance, has grown from 60,000 clients and a loan portfolio of $5 million to a true global presence with more than 1.8 million clients across five continents, and a loan portfolio of more than $800 million. As a frequent keynote speaker on microfinance and social entrepreneurship, Scofield is passionate about inspiring the next generation of young leaders who want to solve big problems like world poverty. His book, The Social Entrepreneur’s Handbook: How to Start, Build and Run a Business that Improves the World (McGraw-Hill, 2011) tells the story of how FINCA was built, as well as providing practical advice on how to find personal passion and build social businesses that change the world. Scofield was in Nigeria recently for FINCA Microfinance Bank Nigeria’s one year anniversary, BEN EGUZOZIE caught up with him in Owerri, and asked him questions on the institution’s financial inclusion and poverty reduction initiative Excerpts:
How do you feel being in Nigeria to witness the one year anniversary of your microfinance institution, FINCA Microfinance Bank Nigeria Limited?
It was a great honor to be present at this historic occasion, and I appreciate the great effort made by the staff and board of FINCA Microfinance Bank Nigeria Limited (FMBNL) to make me feel welcome. I come away more determined than ever, to ensure that our bank lives up to its enormous potential. Despite being one of the most populous countries in Africa, Nigeria has a very high financial exclusion rate. With our one year anniversary and the opening of the second branch, we are proud to reach and help more Nigerians – especially low-income people and small business owners – gain access to financial services; so that they can take part in the economy, generate income for their families, and improve their lives.
FINCA now operates in 23 countries, and came to Africa in 1992 in Uganda to be precise, how come you’re only entering Nigeria just a year plus ago (April 2014)?
It was always our intention to come to Nigeria, but given the challenges presented by this mighty country, we wanted to make sure that we brought our best game. For the first two decades of our work in Africa, Nigeria had very high minimum capital requirements for banks which would have precluded our entry. Then, a very enabling microfinance law was with passed. So now it was up to us to come up with the resources. With the establishment of our holding company in 2011, we now had the “war chest” to make our entrance. It took a little more time to organize ourselves and train our team but now we are here and Philip Takyi and his team are doing a marvelous job.
You claim FINCA is a pioneer in modern Microfinance industry what are the ingredients of its modern microfinance industry?
Once upon a time, microfinance was the slowest moving segment of the financial sector. The success of FINCA and our other colleagues in the responsible microfinance sector, everyone is now doing microfinance: telcos, payments companies, retailers, big commercial banks and even utility companies. Now, microfinance is one of the fastest evolving parts of the global financial system, with everyone in a race to serve the Bottom of the Pyramid. FINCA has accepted this challenge, and is evolving rapidly itself. Running a successful, modern microfinance institution requires continuous innovation. Mobile phones and electronic payment/ deposit systems are becoming commonplace; and even essential for financial institutions like FINCA to compete in many of the countries we operate in. Utilizing these technologies enables us to reach more people, make loans faster and easier to obtain, and save our clients time and money. It’s incredibly exciting to think how far we have come in the past 30 years, and how much farther we are about to go.
In one year of operation in Nigeria, your clientele has risen to 14,000. Added to that, you’ve just opened a second branch, meaning business is looking good. Can you explain how you achieved this?
FINCA has always been a unique financial institution in that we put the customers in the first position. This may sound strange for a bank, which has to deliver a return to its shareholders and fairly compensate its employees, but it actually turns out to be a winning business model.
Acquiring new customers can be the most expensive part of bank’s cost structure. But if you retain a customer once you acquire him or her, then you create a virtuous circle where as your customers wealth grows, they do more business with you and your earnings improve. I’m happy to see this model is working perhaps even better in Nigeria than elsewhere in our 23 country network. Finally, I think Nigerians trust and see us a partner that is in it for the long haul. I think this is why, even after just a short time in this country, FINCA Nigeria received the Microfinance Bank of the Year Award, an award given by the steering committee of the Eastern Nigerian Merit Award to F/Nigeria on August 1.
And what are your success factors?
First, our staff. We have some of the most knowledgeable and warm people working for FINCA in the world. Second, innovation. I think we’re changing the way Microfinance is delivered and have made huge strides is making our customer’s experience easier and cheaper. Third, I think being part of a global network of Microfinance Institutions, one that serves nearly 2 million people in 23 countries, means we’re able to share best practices and knowledge across 5 different continents.
Upon your inauguration in Dec 2014, you claimed you were coming to alleviate poverty through lasting solutions that help people build assets, create jobs and raise their standard of living. How have you carried this out?
At FINCA, we believe that by providing financial services to those who don’t have access to it, we are helping people to improve their lives. Financial services can improve lives by providing needed financing for business activities, which can increase household incomes. With increased income and the ability to save and take on credit, financial services provide the means for low-income families to acquire land, construct or improve their home, purchase livestock and consumer durables or expand their businesses. Essentially, by increasing earnings and savings, financial services allow the poor to make the transformation from every-day survival to planning for the future. Not only do financial services provide budding entrepreneurs with the opportunity to create jobs for themselves, but it ensures that growing microenterprises will provide opportunities for others in the community to access jobs as well.
What have been your CSR in the period under review?
FINCA is dedicated to put our customers first and we are committed to helping our customers create brighter futures for themselves, their families and the communities where they live and work. FINCA Nigeria is also dedicated o improving the customer experience by delivering warmth, trust and responsible banking to our customers. For example, staff from FINCA Nigeria helped to provide traders in Ekeonuwa market, Relief market and World Bank Market in Owerri with parasols that will protect them and their stock from harsh weather conditions.
In an effort to give back to the community, FINCA Nigeria refurbished the Owerri Main Market Amalgamated Traders Association (OMMATA)’s secretariat at Ekeonuwa Market to provide a more comfortable location for market shop owners to meet. FINCA will continue to give back to the community and we have other CSR projects lined up for 2016.
You’ve given out in excess of N1.368 billion as loans, what is your repayment rate so far?
First, let me thank the good people of Imo State for accepting FINCA as their new bank which they trust. Our customers understand that FINCA is committed to building trusted relationships and they have demonstrated this in your repayment rate. The repayment is over 95% which shows that our client’s businesses are growing.
BEN EGUZOZIE
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