Banks, others to dialogue with phone manufacturers for financial inclusion

Mr. Ade Ayeyemi

Mr. Ade Ayeyemi

The Group Chief Executive, Ecobank Transnational Incorporated, Mr. Ade Ayeyemi, was in Nigeria to sign agreements with MasterCard and Visa, as well as to launch the Mobile App simultaneously in 33 counties, to foster its financial inclusion drive targeted at increasing its customers base by additional 100 million by 2020, which will be driven by mostly mobile banking. He spoke with a select group of journalists at the bank’s headquarters in Lagos, as captured by Clara Nwachukwu. Excerpt:

CAN you tell us about Ecobank’s overall vision and new strategy to increase its customer base?
Our goal is to create an Ecobank that serves as a leader not only in the market, but a leader that solves problems that face our customers, ensures financial inclusion and serves the community in which we operate and create value to every stakeholder. Because we are present in 36 markets in Africa, we believe we are ready to solve the challenges facing the continent. Last year, we put our strategies together, and try to see how we can execute them. We rapidly grew from six countries to 36, and now is the time to consolidate where we can bring the platforms together and leverage.
Some said we are going to launch an App; we don’t just launch an App in one country, we are launching in 33 countries. That is very important because if anybody in the continent tries to think about a financial problem that needs to be solved, we have a channel for it.

Financial inclusion on the continent from our point of view, is not just trying to do Good Samaritan for people, it is trying to encourage as many people as possible. That way, it becomes commercially viable. If it is commercially viable then it can be sustainable. We are making it a business model to include as many people as possible. We currently have more than 10 million customers, and by 2020, we want to have 100 million customers. That is not something we talk about easily, we know it is going to be difficult and challenging, but the problem that exists is the problem that needs to be solved, and whoever solves it becomes a great player by the end of the day.

Talking about 100 million customers, how do you want to achieve this and what is the geographical location of your operation?
When you hear Ecobank, you will hear ECOWAS bank. That is true because that is how we were formed. But today, that is not who we have become. We have become a bank that is Pan Africa. When you take the 54 countries in Africa, and I say we are in 36, the easiest way to count is where we are not, and not where we are. We are not in South Africa. When you take the North Africa, we are not in the Maghreb region. But the rest of the places we are. Where are in the whole of East Africa; we are in the most of the Southern Africa; we are in all the Central Africa, and we are in all the West Africa countries that make up ECOWAS.

Where we operate, we will be about a billion people in Africa by 2020. And we understand that for us to have a credible proposition, we have to find a way to that market. That is not just using bricks and mortars, it is not just building branches, it is all about connecting to people at their point of needs and that is why we want to use devices to connect with people. As we go into the future, we are not just going to have devices, but internet of things. But as we look into the future, we believe that mobility is the best way to connect to people and you see why we are launching our Mobile App. It gives a sense of what we are in for tomorrow and get to the 100 million people.

Isn’t these 36 countries quite a handful, considering all the cost implications, though you said you are not going to use bricks and mortars, but in Nigeria that is pretty much what you are doing even though Nigeria is your largest market?
The question of who we are is defined by history. The question of who we want to become is defined our vision and our readiness to move towards that future. The number of branches we have here is history. The fact that we are in 36 countries is history. The question is: how do we effectively move Ecobank into a platform that many people can participate? How many people use WhatsApp in Africa? Nearly everybody. How many WhatsApp offices are in Africa? None. That tells you that as we go into the world in which things can reach the people, more than physical distribution, but through the Internet so that many can participate and value can be created.

A lot of people here use PayPal to make payment but PayPal has no office on the continent. We can not say our ambition is too big to include as many people on the continent. Let us not think about why it can not be done. We think that there are sufficient technologies today to solve the problem. In 1999, when there was discussion on phone in Nigeria, from the Queen Victoria the 1911 to 1999, we had 300,000 lines in Nigeria, and think about today, how many mobile phones connectivity do we have? You have to define problems in different ways and use different innovations to solve them. We are not going to build more banks. We are going to find a way to reach people, and see as we progress. One of the largest hotel in the world, is A and B and B, they don’t have a room, one of the largest Taxi company is Uber, but they don’t have any Taxi. If they can solve those problems without physical presence, let’s not limit our imaginations to physical presence alone. 300,000 to 130 million is what Nigeria has in terms of telephony.

Application has actually helped in terms of mobile inclusion, what exactly is MasterCard and your other partnership bringing on board?
What we are trying to solve, first, is to increase the utility of the phones in the hands of the people. If we say put your money in the phone, the first question is, if you want to buy something, how do you buy? The essence of partnering with other people is to expand the scope of acceptance across the countries we are operating. We can’t think that we will be the only solution; we are a platform that can connect as many people as possible. Once you see yourself as a platform, you can bring other players to participate. We have said we will bring 100 million Africans by 2020 to be our customers. That is a target and we have made it public.

How is Ecobank, working with the public sector and government in the countries they operate to fast-track development?
When people have the ability to save, buy things, set up businesses and they get supported by the banking system, then those countries grow and that is what we do. Remember, we are in so many countries where others are afraid to go. Today, we bank in Burundi, Central Africa Republic, South Sudan; we provide financial services in places you will not even visit because we believe in the future of those countries. We work with governments; there are so many things we do in the countries where we are present that enable the economies of those countries to grow.

We are talking about Mobile App, other banks too have mobile Apps, what makes Ecobank’s unique?
We will be the only one launching in 33 countries in one day. Yesterday, (last week), I was able to transfer money to Cameroon, though I don’t have any account there. We would be able to deliver to 33 markets.

Based on personal experience, I did a transfer like you did from Ecobank to Ecobank it didn’t go well, I had to ask for a refund, which took like close to a month before it dropped back into my account and here you are boasting about your technology efficiency?
At the end of the day if you refuse to take your eyes off the rear view mirror and put it on the screen, it is difficult to se the future. I am saying what I did yesterday. We had a problem and we need to solve it, but if keep our eyes on what happened in the past and we don’t put our eyes on the windscreen so that we can see the future its become difficult. I apologise if a couple of mouths ago you are not able to do that. I am saying that today, we have solved that problem. We set up presence in those markets because we know if we don’t set it all then we have no mind of solving the problem. We are the only bank that has been able to bring to reality the vision of the fathers of ECOWAS. If you refuse to take your eyes off the rear view, you won’t move ahead.

In recent time, there was a directive that one can no longer use the Naira debit cards outside the country, how do you address this issue?
The policy responses of government to temporary problems will always be there, but they cannot define what our future should be. If you think about this five years ago, Nigeria was not in the same position. Five years ago, Nigeria was not saying people cannot use their cards everywhere. Today, this is a temporary problem and we cannot because of a temporary problem withdraw from our imagination.

We cannot operate outside the law; we have to operate within the law. I am sure the government of Nigeria will soon figure out the best way out. Our customers operate within the ambit of the law, just as we operate within the law. What we need to talk about is how to work with government to solve problems so that they don’t make policies that may harm the economy. We don’t go to the rooftop and begin to talk about what government is doing because we can see the problem. There will be issues that government needs to solve, but we will work with government in that aspect, and connecting ECOWAS people is a priority to us.

There is a problem of FX shortage in Nigeria. Every other thing is just reaction because oil use to be sold for $100 and now $50 and the production capacity has dropped. That is the fundamental problem that we need to deal with. All of the rest are consequences of that. But let us not use that as a case to remove the fundamental development in the banking system.

You talk about mobile banking as if it is excluded from the rest of the system; apart from South Africa, and a few other countries, majority of Africa have challenges with infrastructure, even if we are going mobile banking, how do you plan to deal with this?
The first thing is, where we now as country and continent, and where are are we going to be by 2020. Connectivity and the device are two issues here. Remember, I asked how many people use WhatsApp, you said a lot of people, that means a lot of people use smartphones. Imagine all the people that use WhatsApp in Africa, and if they begin to make payment with phones. We need to bring down the price of the handsets and that is why we are working with lots of financial institutions. There is so much money spent in trying to solve the African problem.

We are looking at how the African woman saves. She saves by buying a goat; keeping it for long time, and hoping that when the kids are about going to school she will be able to sell the goat for profit, and use the money to pay school fees. That is, if the goat has not been stolen, died or there is a buyer readily available. Our savings are in livestock, whereas there are other ways she could have saved. Give her an opportunity to have an account that is in a phone. We need to start imaging how we can provide solutions. When I was growing up, people used to go farming and they had associations whereby they contribute together. That was the economy at that time, but they were able to pool savings together. But today, we don’t have that kind of economy anymore because we are now in the urban centres, where people don’t trust each other. We should not just think about the problem in isolation, we should think about the solutions and the power of imagination where problems are solved with technology.

What is Ecobank’s unique selling point?
Our unique selling point is that we belong to a continent; we have been in this continent for a very long time, we are in multiple locations and we want to use technology to solve problems.

What are the challenges ECOWAS has faced over the year?
It is like the challenges all the banks and institutions in the country are facing. We are trying to deliver a world class service in a third world country, where infrastructure is a key challenge. We are trying to do that within the little infrastructure and all of those things create challenges. It is however important to look beyond the problem.

We are still facing the global crisis, you know that there is a downturn, how does it affect you?
Anything that affects our customers affects us therefore we need to figure out how to work with our customers to solve problems.

Recently Ecobank allegedly sacked over a thousand workers, even though officially we were told 200, what was responsible for such mass sack?
What is important for the public and financial journalism is to try and understand that an organisation that has X number of expenditure and has Y income will always look at whether the income is sufficient to cover the expenditure, and if the income is not sufficient to cover the expenditure the organisation has two options. One, reduce the expenditure so that you will be able to pay people’s salary and or you don’t reduce and owe people salary.

Ecobank choose to say that is not the best way to do it. However, everybody that left the organisation was sufficiently taken care of to have a good life after Ecobank. That is how responsible organisations behave. You will see that whatever the number you heard, you have not seen people that are campaigning across our streets saying they worked for Ecobank, and Ecobank didn’t pay them off when they were leaving.

It is important for countries and institutions to have flexibility, so that when you need people, you hire them and when you don’t need people, you pay them off and they go and do something else. It is not only Ecobank, even the Federal Government, the military has retired a number of people. It is the same thing we did.

But we hear more sacks are in the offing?
We don’t bother about what is in the offing, we are working hard to ensure that this institution becomes more profitable so that we are in a position to render our responsibilities to staff, customers and the society. We don’t want the organisation to be run down. We want to run it in a way that is credible. I don’t want to talk about what is in the offing. To be able to restructure NNPC, there has to be a reduction in the number of workers. We have to understand that if you don’t reduce then there will be no fund in the future, and then the organisation will just die. We don’t want the organisation to die, whilst we are focusing on the good things we are doing.

In this article:
Mr. Ade Ayeyemi
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