As part of its plans to support its branches nationwide to reach out to more Nigerians, Baobab Microfinance Bank has concluded arrangements to commence agency banking nationwide.
Kazeem Olanrewaju, managing director and Chief Executive Officer of the bank who stated this while briefing newsmen in Lagos said the move in addition to its digitalization process will help drive its growth plans and support more Nigerian businesses.
“As part of our strategy, what we have done over the years is to open branches everywhere we operate and we have 20 branches. Now, what we want to gradually do is also to be able to render services where we don’t have branches. These services would include payment, collections, insurance products, and been able to give loans. And that is why we are looking at other platforms.
“So we have been talking about digital platform; this is a human platform. We have existing agents in Nigeria and the new loans we want to create. So, it’s going to be a combination of the two. There are new agents that we would appoint, brand their shops, and give them all the technology to be able to render services to our customers. They can collect cash, make payments, customers can withdraw even cash in their accounts from those agents, “he said.
“That is one of the ways, and then, these agents too can also look at customers who probably need some supports in form of loan, and then the request can be made with these agents. And we will have a system in place that would be able to profile, process, and assess the loans, and make a proper decision to be able to extend this loan or not. Hence, we are going to be partnering with some existing agents, some Institutions who have agents, and at the same time, we would be creating new agents that we think are capable of doing every kind of services that we are looking at.”
The bank, he added, has plans to have about 200 agents across the country this year alone. “It is also very important because, prior to this time, we have been testing the brand, and today we are so liquid that we feel that we can easily double our loan book. We need to spread these goodies around the country. Hence it’s not just going to be something that is happening around the five states that we operate at the moment. And it’s going to be bit per time.
“So, months after months, we would be taking certain number to certain places till we cover-up. We have done this in so many other African countries; in Senegal, in Madagascar, in Ivory Coast, and its a huge success. So, we don’t have any doubt about the model that we have. It’s going to run very well also in Nigeria, “he said.
He also disclosed that Baobab Microfinance Bank in line with the directive of the Central Bank of Nigeria (CBN) that all Microfinance banks operating in the country shore up their capital to N3.5 billion by April this year, has met and surpassed the threshold.
Olanrewaju said the capital came via retained earnings as against its initial plans to raise the money via rights issue.
“The central bank expects that by April this year, our shareholders funds should be hitting N3.5 billion, and a minimum of N5 billion by 2021. I am happy to say that at this point, our shareholders fund is over N3. 9 billion, coming from retained earnings. The initial plan was for our shareholders to contribute by rights issue, but giving the level of profitability and growth that we have had in the last few months, it’s looking like we may be able to just have enough from our retained earnings.
“So, if we have major capital projects, then the shareholders would still have to join the equity. Other than that, it would not be for the purpose of meeting recapitalization. In a nutshell, we are fully capitalized to the level that CBN wants us to be by April 2020. We reached that level as far back as October last year, so it’s not an issue today. And then we expect that by the end of this year, we should be at about N5.5 billion or at most, N6 billion, which is above what the CBN is asking, “he stated.
Olanrewaju stated that the bank is well prepared to support SMEs and the economy with several products and its digital transformation.